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OST-2010-0018 - 2010 US-Tokyo (Haneda) Combination Services Allocation Proceeding - Instituting Proceeding and Inviting Applications


US-Tokyo Air Services - Notice from July 8, 1998
OST-1998-3418 - US-Japan Interim Frequency Allocation Proceeding
OST-1998-3419 - US-Japan Combination Services

OST-2016-0048 - 2016 US-Haneda Combination Services Allocation Proceeding - Instituting Proceeding and To Show Cause

US-Japan Bilaterals


2010 US-Tokyo (Haneda) Combination Services Allocation Proceeding

Order 2010-1-17
OST-2010-0018

Issued and Served January 26, 2010

Order Instituting Proceeding and Inviting Applications

By this order, we institute the 2010 US-Haneda Combination Services Allocation Proceeding and invite interested US air carriers to file applications for new US carrier rights at Tokyo’s Haneda International Airport.

On December 11, 2009, the United States and Japan initialed the text of a Memorandum of Understanding that following signature will, among other things, make available to US air carriers four daily pairs of slots for scheduled combination services at Tokyo’s Haneda International Airport, when Haneda’s fourth runway becomes operational. Under the terms of the 2009 MOU, scheduled operations between the United States and Haneda will be subject to the following conditions: (1) US operations at Haneda will be permitted between 2200 and 0700 hours local time; (2) departures from Haneda to a point in the 48 contiguous US states are not permitted prior to midnight; and (3) extra sections are not permitted.

In light of our stated goal of reaching a prompt final decision, we intend to process this case on an accelerated procedural schedule. Therefore, we are establishing the following procedural schedule for submissions:

Petitions for Reconsideration February 2, 2010
Answers to Petitions February 5, 2010
New Applications February 10, 2010
Answers February 22, 2010
Replies March 1, 2010

By: Susan Kurland



Served February 12, 2010

Notice Amending Procedural Schedule

Because of the weather-related closure of the Washington D.C. offices of the Federal Government, including the offices of the Department of Transportation, during the week of February 8, we have amended the procedural schedule in the 2010 U.S.-Haneda Combination Services Allocation Proceeding as follows:

New Applications: February 16, 2010
Answers: March 1, 2010
Replies: March 8, 2010

By: Paul Gretch



February 16, 2010

Application of American Airlines - Bookmarked

American Airlines, Inc. hereby applies for allocation of two daily US-Haneda slot pairs to operate year-round scheduled foreign air transportation of persons, property, and mail on each of the following routes starting October 1, 2010, or when Haneda’s fourth runway opens:

NEW YORK (JFK) – TOKYO (HANEDA)
LOS ANGELES – TOKYO (HANEDA)

American proposes to operate 247-seat B777 aircraft (16F/37C/194Y) to Haneda.

JAL has an established presence at Haneda, and links that airport to more than two dozen cities in Japan as well as Shanghai, Beijing, Hong Kong and Seoul. The 2200 to 0700 operating window will in the short term limit online connectivity between American’s proposed JFK and LAX schedules and beyond cities served by JAL via Haneda. However, we expect that to change in the future as the Haneda window is expanded. American’s alliance with JAL will provide important long-term support for American’s proposed Haneda service, with significant benefits for the public.

Counsel: American, Carl Nelson, 202-496-5647



February 16, 2010

Joint Application of Continental Airlines and Continental Micronesia - Bookmarked

Continental and Continental Micronesia will offer flights between Tokyo Haneda and the most comprehensive hub at New York/Newark, the largest gateway east of Los Angeles; and Guam, which is more than twice the size of the Los Angeles gateway, the mainland's largest.

Continental's proposed New York/Newark-Tokyo Haneda flights will complement Continental's daily nonstop New York/Newark-Tokyo Narita flights, which will continue to operate and offer alternative time of day departures and arrivals as well as service for passengers who prefer service at Tokyo Narita or are making connections there.

Continental Micronesia's proposed Tokyo Haneda flights will provide additional travel options for the growing number of military service and contractor personnel and their families in Guam, who will have increasing travel needs within-the region. Daily flights will be important so Continental Micronesia can meet the demand for Tokyo Haneda service and compete effectively with Japanese carriers that have greater access to Tokyo Haneda than Continental Micronesia, so Continental Micronesia should be awarded daily slots for its proposed Guam-Tokyo Haneda service.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615


February 16, 2010

Application of Delta Air Lines - Bookmarked

In this proceeding, Delta seeks allocations of Haneda slots to fund daily service on each of the following routes:

Seattle-Haneda
Detroit-Haneda
Los Angeles-Haneda
Honolulu-Haneda

With ANA and JAL as partners, the US members of Star and oneworld will enjoy unparalleled access to Haneda. American, United, Continental and US Airways have each received authority from the Department for unrestricted blanket codesharing across their US-Japan networks. And, these alliances are expected to deepen their ties through antitrust immunized arrangements – which are the equivalent of a synthetic merger. Under no circumstances should any US carrier member of Star or oneworld receive a single slot at the expense of Delta’s full proposal.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184


February 16, 2010

Application of Hawaiian Airlines - Bookmarked

Hawaiian proposes to initiate two daily nonstop flights between Haneda and Honolulu International Airport beginning upon the commencement of the Winter 2010 IATA scheduling season. Hawaiian intends to operate its proposed flights with Boeing 767-300 ER aircraft.

The grant of two daily slot pairs to Hawaiian will inject a new competitor into the Tokyo market. Hawaiian, unlike most ifnot all of the other applicants, presently has no access to Japan or the important Tokyo market. Hawaiian has a long history and presence in the Pacific and will bring its award-winning customer service and on-time performance to this market. Hawaiian's service will also introduce a new carrier with an established presence in Japan to the Tokyo-Hawaii market, in which US-flag service is currently dominated by the large US carriers. This new service is also important to Hawaii and its tourism-based economy, as it will bring mainly Japanese-originating tourists to visit Hawaii and spend within the state's economy.

Counsel: Hawaiian and Dow Lohnes, Jonathan Hill, 202-776-2000


February 16, 2010

Application of United Air Lines for an Allocation of Slots for US-Haneda Combination Service - Bookmarked

No carrier currently may provide scheduled nonstop US-Haneda service, even though Haneda, with its convenient location in close proximity to downtown Tokyo and extensive connections to other cities in Japan and Asia, is an attractive airport for such service. Given the limited number of slots available for US carrier service at Haneda, it is imperative that the Department select the proposals that will best meet the needs of the greatest number of U.S. consumers, including both nonstop and connecting passengers. United’s proposed SFO-HND service using B777 aircraft will certainly rank among the top four proposals in this respect.

The combination of substantial local San Francisco-Tokyo O&D traffic and convenient online one-stop connections to and from Haneda via San Francisco for passengers from 27 other airports, which together account for 40% of all US-Tokyo passengers, will deliver high load factors for United’s San Francisco-Haneda service.

Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6000



February 25, 2010

Re: DOT Notice of Communication

On February 19, 2010, during a phone conversation with Representative John Dingell, the Congressman expressed his support for the application of Delta Air Lines in the 2010 US-Haneda Combination Services Allocation Proceeding. I responded that, while I appreciated his interest in this case, I could not comment on its merits because the proceeding was under active consideration by the Department.

By: DOT



March 1, 2010

Answer of American Airlines - Bookmarked

The Department should promptly conclude this proceeding by awarding two of the four slot pairs in issue to American to serve Haneda from New York and Los Angeles, the two largest Mainland-Tokyo markets, notwithstanding American’s prospective antitrust immunity with JAL. From these gateways, American will provide roundtrip on-line Haneda service in the 10 largest Mainland-Tokyo markets. Selection of American will benefit U.S.-Japan passengers and allow American to achieve a stronger competitive position for itself and for oneworld versus incumbent airlines and their alliance partners.

Counsel: American, Carl Nelson, 202-496-5647


March 1, 2010

Joint Answer of Continental Airlines and Continental Micronesia - 10MB - Bookmarked

Continental and Continental Micronesia have applied to offer Tokyo Haneda service at hub gateways serving two of the four largest US-Tokyo markets, while American has applied to serve two markets where American offers very few connections; Delta, to protect its Tokyo Narita hub from new competition, has greedily applied for all four opportunities to serve two of the smallest markets at issue and two markets where Delta has virtually no connecting flights despite bragging that consumers "can continue to count on Delta for unmatched access to Japan, with nonstop service between 10 US destinations and Tokyo" without any new flights; Hawaiian never implemented Tokyo Narita authority it was awarded previously but now asks for two opportunities to provide a single service; and United has proposed to serve a gateway with far fewer passengers than the top four US-Tokyo markets.

To maximize the public benefits available as a result of the Department's successful efforts to open the skies over Japan, Continental's proposal to operate daily New York/Newark-Tokyo Haneda flights and Continental Micronesia's proposal to operate daily Guam-Tokyo Haneda flights should be among the four proposals selected.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615


March 1, 2010

Answer of the Guam Parties in Support of Continental Micronesia - Bookmarked

The Department should quickly and decisively award Continental Micronesia one pair of slots from the four available daily US-Tokyo Haneda combination slot-pairs to commence its much-needed Guam-Tokyo Haneda service as early as October 2010 as well as awarding additional slots available in this proceeding to the other largest US gateways and airlines offering the best connecting networks at those gateways.

Counsel: Mair Mair, David Mair, 671-472-2089


March 1, 2010

Answer of the New Jersey Parties in Support of Continental Micronesia - Bookmarked

As the support from New Jersey elected officials, businesses and individuals in this proceeding attests, granting Continental's application for one daily pair of newly available slots for US-Tokyo Haneda scheduled combination services for flights between Newark/New York, the second largest US mainland-Tokyo gateway and Tokyo Haneda, at Newark Liberty International Airport-the only true hub in the Newark/New York Metropolitan Area, is extremely important to Newark and New Jersey. Nonstop service to close-in Tokyo Haneda airport at Newark will benefit passengers in the large local Newark/New York-Tokyo market as well as passengers traveling between points throughout Continental's Newark Liberty hub network and Tokyo Haneda.

By: Newark Regional Business Partnership, Chip Hallock, 973-242-4209


March 1, 2010

Answer of Delta Air Lines - Bookmarked

Delta has submitted US-Haneda service proposals from Seattle, Detroit, Los Angeles and Honolulu that will maximize consumer benefits and competition for the traveling public. Each of these gateways will provide significant service benefits and promote effective 3-way alliance competition between Delta and the Star (United/Continental/ANA) and oneworld (American/JAL) alliance carriers. Delta’s proposals will create a third competitor in hundreds of US-Haneda city-pair markets and are backed by a strong service commitment with 403-seat B747-400 and 298-seat A330-300 aircraft – delivering the greatest capacity and greatest benefits of any applicant at the critical but tightly constrained Haneda airport. We believe that the selection of Delta for service at Seattle, Detroit, Los Angeles and Honolulu will maximize consumer benefits by promoting broad-based alliance competition to the Star and oneworld carriers which already have a major presence at Haneda by virtue of the large hubs and extensive slot holdings maintained by JAL and ANA.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184


March 1, 2010

Answer of the Delta Master Executive Council of the Air Line Pilots Association in Support of Delta Air Lines

In order for Delta to maintain a competitive Tokyo operation, it is important for Delta to be able to re-enter Haneda with sufficient slots to challenge the incumbent alliance carriers operating there. Delta does not have an alliance partner at Haneda, and there is no other means to obtain the necessary slots to operate. Allocation of four slot pairs to Delta will ensure strong and effective competition to the incumbent alliances which have a large presence at Haneda - and will provide new flying opportunities to help offset the harmful effects of the proposed new agreement on Delta's longstanding Narita operation.

By: ALPA, Donald Moak


March 1, 2010

Answer of Port of Seattle in Support of Delta Air Lines - Bookmarked

The Port of Seattle, as the owner-operator of Seattle-Tacoma International Airport, respectfully submits this Answer to the application of Delta Air Lines Inc. for a slot allocation to engage in daily service between Tokyo’s Haneda International Airport and Seattle, Washington.

Seattle needs and deserves nonstop service to Haneda. Seattle has a long and distinguished history as a gateway to Asia, and Seattle is particularly pleased that Delta has made the growth and development of international service at Seattle a centerpiece of its West Coast strategy. Haneda is highly preferred by time-sensitive Tokyo passengers. Accordingly, it is vital to Seattle as a gateway, and to Delta as our largest international service provider, to have access to this critical airport serving downtown Tokyo. Authorizing Haneda service will also benefit our hometown hub carrier, Alaska Airlines, which provides an extensive feed network fueling the growth of international service. Seattle will be competing for Tokyo passengers up and down the west coast and should not be placed at a competitive disadvantage.

By: Port of Seattle, Isabel Safora, 206-787-3216


March 1, 2010

Answer of Wayne County Airport Authority in Support of Delta Air Lines - Bookmarked

New Haneda service from Detroit will maximize service and competition for Haneda passengers, particularly for travelers in the eastern half of the United States. The other proposals for eastern US-Haneda service are New York gateway proposals by carriers that already have the ability to serve Haneda in concert with their Japanese alliance partners. Only Delta's Detroit proposal creates a third competitive option for eastern US passengers.

Detroit is the best and most effective gateway for Eastern US passengers. Only the selection of Delta for Detroit service will ensure effective Haneda competition against the Star and Oneworld alliances, which have access through the Japanese incumbent carriers operating at Haneda. The lack of a Japanese carrier in the SkyTeam alliance strongly favors an award to Delta in this proceeding to secure competitive access to Tokyo's Haneda airport. The likely existence of two immunized alliances across the Pacific, both of which enjoy built-in Haneda service advantages, makes it essential to provide Delta with enough Haneda access to balance the effects of the multiple "bites at the apple" afforded its alliance competitors. Haneda access will enhance the competitiveness of the Detroit hub, and benefit Detroit itself which is a center for trade, research, and manufacturing for North America with a business community anchored by companies with extensive ties to both countries. In order to sustain needed growth in our economy over the next decade, Detroit needs to be able to serve this prime market with nonstop service to the most convenient airport to Central Tokyo.

By: WCAA


March 1, 2010

Consolidated Answer of Hawaiian Airlines - Bookmarked

From a reading of four of the five applications in this proceeding one assumes that this case is about allocating the four daily Haneda slot pairs among incumbent alliance carriers andlor their Japanese partners to further secure their already-dominant positions in the Tokyo market. In reality this proceeding is about the award of additional operating rights to Tokyo in a manner that provides the traveling public with travel alternatives that are in the public interest, not adding to an already oligopolistic control of Tokyo service. This case is and should be about offering award-winning service and on-time performance for the traveling public from a carrier with the financial incentive and ability to develop a successful operation at Tokyo International Airport (Haneda) that is not simply a diversion of traffic from existing service and an existing hub. That carrier is Hawaiian Airlines.

The Department of Transportation is faced with a critical choice in this proceeding: grant two slot pairs to Hawaiian Airlines, Inc., a new entrant that will introduce and maintain its award-winning service to the largest US gateway from Tokyo, or reaffirm the status quo and inhibit new competition by awarding all four slot pairs to the entrenched incumbent US carriers offering nothing new to the US-Tokyo market. Awarding more slot pairs to the four legacy network carriers, American, Continental, Delta or United, at Hawaiian's expense would run counter to the Department's goal of choosing the proposals that maximize the public benefits.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


March 1, 2010

Consolidated Answer of United Air Lines - Bookmarked

The Department should award United a pair of daily slots to introduce non-stop San Francisco-Haneda service because United's proposal offers a unique and superior set of consumer benefits. It is imperative that the Department select one or more West Coast gateways for HND service, and United's SFO proposal clearly is the best choice among the various West Coast applications (or, for that matter, among the applications from any other geographic region). In addition, United has the resources and expertise to maximize the benefits of Haneda service for the US traveling public, having long been a leader in trans-pacific services, with San Francisco as its primary hub/gateway for service to Asia.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6000


March 1, 2010

Answer of San Francisco International Airport in Support of United Air Lines - Bookmarked

The San Francisco International Airport hereby answers in strong support of the application of United Air Lines, Inc. for slots needed to introduce a daily nonstop service between San Francisco and Tokyo's Haneda International Airport. Allocating one of the four available Haneda opportunities for service to SFO clearly maximizes the public benefits of this newly-negotiated access to Tokyo's convenient downtown airport, enabling service to an exceedingly strong market and most effectively amplifying the benefits of muchimproved access to downtown Tokyo for travelers throughout the US. Numerous business, civic, and cultural organizations in the San Francisco Bay Area, as well as government leaders from the region, have added their voices in support of the United application.

By: SFO, Kandace Bender, 650-821-5000



March 3, 2010

Re: DOT Notice of Communication

On February 21, 2010, during a meeting with Governor Linda Lingle of Hawaii, the Governor raised the subject of the 2010 US-Haneda Combination Services Allocation Proceeding, emphasizing the importance to the State of Hawaii of air service to Japan. She also noted that both Hawaiian Airlines and Delta Air Lines had recently filed applications for service to Haneda airport.

I informed the Governor that, while I appreciated her interest in this case, I could not conunent on its merits because the proceeding was under active consideration by the Department.

By: DOT


February 26, 2010

Re: Michigan Senators in Support of Delta Air Lines

As members of the Michigan Congressional Delegation, we write in strong support of Delta Air Lines' application for new passenger services between the United States and Tokyo's Haneda airport.

By: Michigan Senators Carl Levin and Debbie Stabenow


March 1, 2010

Re: Comments of Detroit Regional Chamber in Support Delta Air Lines

On behalf of the Detroit Regional Chamber, I am writing to express our strong support for the application of Delta Air Lines for new nonstop service between Detroit and Haneda.

By: Richard Blouse


March 5, 2010

Re: Support Letters for Hawaiian Airlines - Set 1 - Government and Commercial Support
Re: Support Letters for Hawaiian Airlines - Set 2 - Commercial Support

Counsel: Dow Lohnes, Lynn Deavers, 202-776-2408



March 8, 2010

Consolidated Reply of Alaska Airlines and Horizon Air

Alaska and Horizon can transfer significant volumes of Haneda connecting traffic at its Seattle gateway as well as at its Los Angeles gateway and, if the Department decides to select only one West Coast-Haneda gateway, Alaska and Horizon would urge that Seattle be that gateway with Delta’s proposed service. However, if the Department decides to select two West Coast gateways, Alaska strongly supports Los Angeles as the second gateway with either Delta’s or American’s proposed service.

Counsel: Squire Sanders, Marshall Sinick, 202-626-6600


March 8, 2010

Reply of American Airlines - Bookmarked

American’s application to serve Haneda from JFK and LAX should be granted ahead of the other requests. There is no public interest justification for giving all four slots to Delta, the world’s largest airline and largest US carrier to Japan, with a 52% market share. Delta operates a substantial hub at Narita with 16 daily departures to U.S. points and 10 daily departures to cities in Asia, and a second Asia hub at Seoul where it enjoys ATI with Korean Air.

For service to Haneda from New York, the Department should choose American (JFK) over Continental (EWR). JFK is the preferred airport for international service, and American at JFK has better on-time performance than Continental at Newark. Newark ranks last in on-time performance among the 31 reportable airports. Moreover, if United receives SFO authority, American should be selected ahead of Continental to ensure balanced competition among the three global alliances.

The Department should not award slots for flights from Haneda to Honolulu (Hawaiian Airlines) or Guam (Continental Micronesia). These markets are well served today, and do not require departures from Tokyo’s close-in airport. Moreover, Hawaiian Airlines has never operated scheduled service to Tokyo, and has not operated charter flights to Japan for 20 years, casting doubt on its credibility as an applicant here.

Counsel: American, Carl Nelson, 202-496-5647


March 8, 2010

Joint Reply of Continental Airlines and Continental Micronesia - 16MB - Bookmarked

In selecting four proposals for Tokyo Haneda service, the Department's public interest standards seeking to provide the most benefits to the most consumers require the Department to begin with providing the most benefits to the most nonstop US-Tokyo passengers and their communities. In evaluating which applicant should be authorized to serve which gateway, the Department must consider the carriers' ability to flow traffic through their proposed gateways on their own connecting flights, their track records of promptly instituting and maintaining service between those gateways and Tokyo and other points in Asia, and their abilities to compete with the incumbent US airlines that have dominated the US-flag service to, through and beyond Japan as beneficiaries of US-Japan bilateral provisions limiting competition by other US-flag airlines. Based on these criteria, Continental's New York/Newark-Tokyo Haneda proposal and Continental Micronesia's Guam-Tokyo Haneda proposal clearly should be selected.

Counsel: Crowell & Moring, Gerald Murphy, 202-508-8855


March 8, 2010

Re: Letters in Support of Continental and Continental Micronesia

Exhibit CO-R-125 (Approximately 75 mb in Size)

Pleae find attached the Corporate Partner and Employee Letters of Support that make up Exhibit CO-R-125 of the Reply of Continental Airlines, Inc. and Continental Micronesia, Inc. in the 2010 US-Haneda Combination Services Proceeding.

Counsel: Crowell & Moring, Gerald Murphy, 202-508-8855


March 8, 2010

Reply of the Continental Airlines Master Executive Council of the Air Line Pilots Association International

Some parties have suggested that the Department should award no frequencies to Continental Airlines or Continental Micronesia because of their codeshare alliance with All Nippon Airways, but the Department should not mandate that Tokyo Haneda flying pursuant to that alliance be undertaken by All Nippon Airways pilots rather than by Continental Airlines pilots. This would detract from what should be an important underlying purpose and benefit of the proposed new bilateral aviation agreement, which is to create high quality jobs for employees of United States employers.

Counsel: ALPA, Jay Pierce


March 8, 2010

Reply of Delta Air Lines - Bookmarked

Under their immunized joint ventures, the Star and oneworld carriers say that they will engage in integrated route planning, joint pricing, revenue sharing, and joint marketing and sales. The object of “metal neutrality” is to erase any distinction or preference between the operating and marketing carriers. In granting antitrust immunity, the Department places a heavy emphasis on joint venture “integrative efficiencies” and has concluded that carve outs are an inappropriate and ineffective remedy.

It is not realistic to think that the Star and oneworld carriers could merge their US-Japan networks, their marketing and corporate sales efforts, and coordinate fully at Narita while remaining competitors at the limited-entry Haneda airport. For this reason, a Haneda carve out would not work. It would both impair the function of the alliances and lessen the benefits attainable from the limited entry slots. On the other hand, if the US and Japanese alliance partners are granted the broad immunity they are requesting, they would be able to share in the commercial results of those services at Haneda.

Delta urges the Department to apply the same policy and precedent from the recent oneworld Show Cause Order, namely that: “Airlines are not eligible [Haneda slot] recipients if they are members of the oneworld [or Star] global alliance, affiliates of the applicants, or airlines in which the airlines have a substantial financial interest.”

Counsel: Delta, Sascha Van der Bellen, 202-842-4184


March 8, 2010

Re: 11,000 Support Letters for Delta Air Lines

Enclosed please find a CD containing more than 11,000 letters from Delta employees to Secretary LaHood expressing support for Delta’s application to serve Haneda Airport.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184


March 8, 2010

Reply of the Port of Seattle in Support of Delta Air Lines - Bookmarked

The award of Haneda slots for Seattle service will also enable the airport to keep pace with Vancouver in the competition to attract international passengers to and from the entire West Coast, including Washington, Oregon and part of Canada. By the end of 2010, Vancouver is expected to have at least one Canadian and one Japanese carrier providing nonstop Haneda service. The residents of and visitors to the Pacific Northwest deserve the opportunity to choose U.S.-flag service and a US gateway without backtracking through California.

Counsel: Port of Seattle, Isabel Safora, 206-787-3216


March 8, 2010

Consolidated Reply of Hawaiian Airlines - Bookmarked

Without exception, Hawaiian Airlines, Inc.’s proposal in this proceeding is criticized because it will carry primarily Japan-originating traffic and therefore is somehow a benefit to Japan and not to the United States. Likewise, other applicants claim Hawaiian should be relegated to providing charter service to Japan rather than scheduled service – this from four carriers who, together with their alliance partners, control 99% of the US-Tokyo market even without any slot pairs from this proceeding. In fact, Hawaiian’s proposal is the only one that will bring significant revenue into the United States and create new jobs because it will bring high-spending Japanese travelers to a part of the country where they most want to visit, thereby creating jobs, infusing revenue into the United States and supporting the major industry of Hawaii, tourism. It also is the only proposal that will make progress toward ensuring meaningful competition exists in the US-Tokyo market, if and when antitrust immunity is granted to American, Continental and United in their respective oneworld and Star alliances, a condition precedent to any US-flag service to Haneda being permitted. The Department must not pass up this critical opportunity to promote independent US-flag competition by introducing an award-winning new entrant into the scheduled passenger market at Haneda.

Awarding more slot pairs to the four legacy network carriers, American, Continental, Delta or United, at Hawaiian’s expense would run counter to the Department’s goal of choosing the proposals that maximize the public benefits and encouraging new entrant carriers. These carriers already have extensive direct and/or code-share service in the US-Tokyo market. Moreover, since Japanese carriers will be obtaining slot pairs for service from Haneda as a result of the MOU, the alliance carriers in this proceeding are slated to obtain benefits from both sides of the Pacific.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


March 8, 2010

Consolidated Reply of United Air Lines - Bookmarked

The applications and answers filed in this proceeding demonstrate that United's proposed daily non-stop combination service between San Francisco International Airport and Tokyo Haneda International Airport would provide greater overall benefits for the US traveling and shipping public than any of the services proposed by the other applicants - each of whom, in contrast to United, has sought an award of multiple slot pairs. Therefore, United should be awarded the single slot pair it has requested, leaving three slot pairs available for allocation to other carriers.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6000


March 8, 2010

Reply of San Francisco International Airport - Bookmarked

The only significant argument leveled against SFO specifically is that it is such an "obvious" Haneda market that some Japanese carrier will surely choose to serve it as a top priority - so, the argument goes, DOT need not worry about "spending" a slot pair to enable a US airline to serve SFO-Haneda. Delta's Answer says so explicitly: "[E]ven absent an award to United in this case, San Francisco is still likely to receive nonstop Haneda service from ANA." (Wayne County similarly speculates, in its Answer, that such foreign carrier service is "extremely likely.") In effect, United's competitors argue, perversely, that SFO is such a strong market and so deserving of Haneda service that DOT should deny that valuable opportunity to a US carrier because any rational Japanese carrier will surely not pass it up.

Counsel: SFO, Kandace Bender, 650-821-5000



March 4, 2010

Re: Association of Flight Attendants-CWA in Support of Delta Air Lines

I am writing on behalf of the Association of Flight Attendants, Northwest Airlines Master Executive Council, representing approximately 7,500 pre-merger Northwest Airlines flight attendants. I write in support of the Delta Air Lines application to provide new non-stop service from points within the United States to Tokyo's Haneda Airport. We hope that you will give strong consideration and ultimate approval to Delta's application for these new route authorities.

By: Janette Rook


March 4, 2010

Re: Los Angeles World Airports in Support of American Airlines

On behalf of Los Angeles World Airports, the owner and operator of Los Angeles International Airport, I strongly urge the United States Department of Transportation to award one slot for nonstop service between LAX and Tokyo Haneda International Airport to American Airlines.

By: Gina Marie Lindsey


March 5, 2010

Re: Elmira Corning Regional Airport in Support of Delta Air Lines

On behalf of Elmira Corning Regional Airport, I am writing to express our strong support for the application of Delta Air Lines for new non-stop service between Detroit and Tokyo Haneda.

By: Thomas Santulli


March 4, 2010

Re: Letter of BorgWarner in Support of Delta

I am writing to express our strong support for the application of Delta Air Lines for new nonstop service between Detroit and Tokyo (Haneda).

By: Bradley Snyder


March 15, 2010

Re: Letter of Los Angeles World Airports in Support of Delta

On behalf of LAWA, the owner and operator of Los Angeles International Airport, I strongly urge the US DOT to award one slot for nonstop service between LAX and Tokyo Haneda to Delta.

By: LAWA, Gina Marie Lindsey


March 22, 2010

Re: Additional Letters in Support of Hawaiian Airlines

1. Association of Flight Attendants-CWA, Hawaiian Master Executive Council
2. Hawaii County Council
3. Honolulu Japanese Chamber of Commerce
4. San Jose Silicon Valley Chamber of Commerce
5. Hawaii Business Roundtable, Executive Committee Member Dee Jay Mailer
6. Bank of Hawaii
7. Hawaii National Bank
8. The Gas Company LLC
9. Outrigger Enterprises Group

Counsel: Dow Lohnes, Lynn Deavers


March 18, 2010

Re: Letter of Hawaiian Airlines Master Executive Council ALPA in Support of Hawaiian Airlines

On behalf of the more than 425 pilots of Hawaiian Airlines, I am writing to you today in support of Hawaiian Airlines' application for route authority to Tokyo's Haneda International Airport. I believe Hawaiian is the best candidate in the current slot allocation proceeding and deserves to be included among the winners of this process.

By: Eric Sampson


March 23, 2010

Re: Additional Letters in Support of Continental Airlines

Please find attached letters of support for Continental's proposed nonstop daily New York/Newark-Tokyo Haneda service from 31 Congressional members from New Jersey, New York, Texas and Ohio; the Mayor of Cleveland; the Norfolk Airport Authority and other additional letters of support.

Counsel: Crowell & Moring, Gerald Murphy, 202-508-8855


March 23, 2010

Re: Additional Letters in Support of Delta Air Lines

Counsel: Delta, Sascha Van der Bellen, 202-842-4184


March 23, 2010

Re: Letter of Amway in Support of Delta Air Lines

On behalf of Amway, I am writing to express our strong support for the application of Delta Air Lines for new nonstop service between Detroit and Haneda.

By: Amway


March 26, 2010

Re: Letters in Support of Delta Air Lines

Please find 34 letters in support of Delta's application for a Seattle-Haneda route. Included are letters from government and civic organizations as well as corporations.

By: Port of Seattle, Isabel Safora, 206-787-3000


March 29, 2010

Re: Letters in Support of Continental Airlines

Please find attached letters of support for Continental's proposed nonstop daily New York/Newark-Tokyo Haneda service from Congressional members from Ohio and the Mayor of the City of New York.

Counsel: Crowell & Moring, Gerald Murphy, 202-508-8855


March 30, 2010

Re: Third Set of Letters in Support of Hawaiian Airlines

Five additional letters of support of Secretary LaHood urging the DOT's approval of Hawaiian Airlines' Application for two slot pairs to institute twice-daily between Honolulu and Haneda.

Counsel: Dow Lohnes, Lynn Deavers, 202-776-2408


March 30, 2010

Re: Letter in Support of Delta Air Lines

Attached please find the Washington State Congressional Delegation letter in support of Delta Air Lines’ proposed Seattle-Haneda service.

By: Port of Seattle, Kazue Ishiwata, 206-787-5388


April 8, 2010

Re: Letter of New York Congressmen in Support of Continental Airlines

Counsel: Crowell & Moring, Gerald Murphy, 202-508-8855


April 9, 2010

Re: Letters in Support of American

American Airlines, Inc. hereby submits letters in support of its application for US-Tokyo (Haneda) authority from Federal and State elected officials, mayors, airports, chambers of commerce and union leaders. American is seeking 14 weekly frequencies to operate daily nonstop service to Haneda from New York (JFK) and Los Angeles.

Counsel: American, Carl Nelson, 202-496-5647


April 13, 2010

Re: Letters in Support of American Airlines
Travel Agencies and Commercial Business

Counsel: American, Carl Nelson, 202-496-5647


April 14, 2010

Re: Additional Letters in Support of American Airlines
Travel Agencies and Corporate Travel Departments

Counsel: American, Carl Nelson, 202-496-5647


April 8, 2010

Re: Letters in Support of Delta Air Lines

Attached please find letters of support from various organizations in the community in support of Delta Air Lines’ proposed Seattle-Haneda service.

By: Port of Seattle, Kazue Ishiwata


April 21, 2010

Re: Letters in Support of Continental Airlines
New Jersey Senator Frank Lautenberg


April 22, 2010

Re: Additional Letters in Support of Delta Air Lines
Elected Officials, Airports, Corporations, Travel Agencies and Customers

Counsel: Delta, Sascha Van der Bellen, 202-842-4184


April 23, 2010

Re: Additional Comments in Support of American Airlines
Governor of New York

Counsel: American, Carl Nelson, 202-496-5647


April 26, 2010

Re: Additional Letters in Support of Delta Air Lines
Commercial, Cities and Airports

Counsel: Delta, Sascha Van der Bellen


April 30, 2010

Re: Additional Letters in Support of Delta Air Lines
Elected Officials, Airport Managers and Corporations

Counsel: Delta, Sascha Van der Bellen, 202-842-4184



Order 2010-5-7
OST-2010-0018

Issued and Served May 7, 2010

Order to Show Cause - Bookmarked

By this Order, we tentatively allocate four available slot pairs for daily scheduled combination services between the United States and Tokyo’s Haneda Airport, as follows: 1) one slot pair to Hawaiian Airlines for its proposed Honolulu-Haneda service; 2) two slot pairs to Delta Air Lines for its proposed Los Angeles-Haneda and Detroit-Haneda services; and 3) one slot pair to American Airlines for its proposed New York (JFK)-Haneda service. We tentatively decide not to award backup authority in this case. We also tentatively award Hawaiian underlying economic authority to engage in its proposed services.

By: Susan Kurland

DOT Announces Proposed Decision to Award Four Routes at Tokyo's Haneda Airport - DOT Press Release - May 7, 2010



March 19, 2010

Re: Indianapolis Airport Authority in Support of Delta

On behalf of the Indianapolis Airport Authority, I am writing to express our strong support for the application of Delta Air Lines for new nonstop service between Detroit and Haneda.

By: John Clark


March 23, 2010

Re: Port of Everett in Support of Delta

On behalf of the Port of Everett, I am writing to express our strong support for the application of Delta Airlines to provide new nonstop air service between Seattle-Tacoma International Airport and Tokyo Haneda International Airport.

By: John Mohr


March 23, 2010

Rre: Erie International Airport in Support of Delta

Oh behalf of Erie International Airport, lam writing to express our strong support for the Delta Air Lines application for new nonstop service between Detroit and Haneda

By: Christopher Rodgers


March 25, 2010

Re: Tri-Cities Regional Airport in Support of American/JAL

Thank you for the opportunity to express our support for the application for antitrust immunity and the proposed joint business agreement filed by American Airlines and Japan Airlines. We see this proposed alliance as vital for oneworld to compete effectively with the Star and SkyTeam alliances. The increased interalliance competition will in turn enhance the benefits of the Department's Open Skies policy - first by solidifying US-Japan Open Skies, then by serving as a foundation for further liberalization across Asia.

By: Ken Maness


February 24, 2010

Re: Michigan State Senate in Support of Delta

As state legislators representing Detrdit Metropolitan Airport, we are writing to express our whole-hearted support for the application of Delta Air Lines for new nonstop service between Detroit and Haneda.

By: Raymond Basham


February 26, 2010

Re: Seattle City Council in Support of Delta

As members of the Seattle City Council, we write in strong support of Delta Air Lines' application for new passenger services between the Seattle-Tacoma Airport and Tokyo's Haneda Airport.

By: Richard Conlin


February 26, 2010

Re: City of Syracuse Department of Aviation in Support of Delta

On behalfof Syracuse Hancock International Airport, I am writing to express our strong support for the Delta Air Lines application for new nonstop service between Detroit and Haneda.

By: Rory McMahon


March 15, 2010

Re: Fort Wayne-Allen County Airport Authority in Suport of Delta

On behalf of the Fort Wayne-Allen County Airport Authority - owner and operator of Fort Wayne International Airport in Fort Wayne, Indiana, I am writing to express our strong support for the application of Delta Air Lines for new nonstop service between Detroit and Haneda.

By: Torrance Richardson


March 15, 2010

Re: McQuay International Airport in Support of Delta

On behalf of McQuay International, I am writing to express our strong support for the application of Delta Air Lines for new nonstop service between Detroit and Haneda.

By: Takenori Miyamoto


March 15, 2010

Re: Harrisburg International Airport in Support of Delta

On behalf ofthe Susquehanna Area Regional Airport Authority, I am writing to express our strong support for the Delta Air Lines application for new nonstop service between Detroit and Haneda.

By: Timothy Edwards


March 22, 2010

Re: Chippewa County Economic Development Corporation in Support of Delta

The Economic Development Corporation of Chippewa County and Chippewa County International Airport, the only commercial airport located in Michigan's Eastern Upper Peninsula, wish to express strong support for the application of Delta Air Lines for new nonstop service between Detroit Metro and Haneda Tokyo airports.

By: Kathy Noel



May 17, 2010

Comments of Delta Air Lines

Delta is very pleased to have been selected by the Department to provide service to Tokyo’s Haneda Airport from Detroit and Los Angeles. While Delta was disappointed that Seattle was not also chosen to receive Haneda service, we understand the difficult choices faced by the Department in allocating the limited slots available, and that unfortunately, despite Seattle’s many positive attributes, there were not sufficient slots to fund Seattle service at this time.

The Department’s selection of Detroit-Haneda and Los-Angeles-Haneda is well justified and fully supported by the record. Delta agrees with the Department’s tentative finding that central and eastern US passengers should have access to Tokyo’s downtown airport. Detroit is the most convenient Haneda gateway for the greatest number of central and eastern US passengers. Detroit’s award-winning terminal, vast airside capacity, and state-of-the-art federal inspection facilities guarantee efficient, on-time connections for one million potential Haneda passengers in over 100 US cities.

Delta is also pleased to have been selected to provide service at Los Angeles, the largest west coast and mainland US-Tokyo market. In addition to serving the needs of this large local market, Delta’s network at Los Angeles, together with that of its domestic alliance partner, Alaska Airlines, will provide important connecting opportunities to Tokyo from cities across the United States.

Delta urges that the Department’s tentative findings be confirmed as quickly as possible in a Final Order, so that carriers can finalize service preparations and begin advance marketing activities.

Counsel: Delta, Sascha Van der Bellen, 202-841-4184


May 17, 2010

Joint Objections of Continental Airlines and Continental Micronesia

The Department should, at the very least, award backup authority to Continental for Delta's Detroit service and American's JFK service. The Department should not rely on Delta to continue operating two daily nonstop B-747 Detroit-Tokyo flights. Since Continental is the only other applicant to offer a hub network in the eastern United States, the Department should award backup authority to Continental in the event that Delta fails to institute its proposed Detroit-Haneda flights or terminates its Detroit-Haneda flights.

Similarly, since service between New York/Newark and Haneda is critical, the Department should select Continental, the only airline beside. American to apply for New York/Newark, for backup authority in the event American fails to institute its New York/Newark-Haneda flights promptly or terminates them at a later date so that additional Tokyo service in the second largest US mainland-Tokyo market can be restored promptly. Finally, to ensure that Pacific Islands tourism benefits from at least one Haneda award, Continental Micronesia should be awarded backup authority to Hawaiian.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615


May 17, 2010

Objections of Hawaiian Airlines

While Hawaiian is grateful for the tentative award of one (1) slot pair for its first choice HNL-HND proposal, the Department did not address Hawaiian's second proposal, for a second daily flight between Honolulu and Haneda. As explained in its prior filings, Hawaiian is entering a market that is overwhelmingly dominated by alliance carriers from both Japan and the United States. Awarding Hawaiian two (2) slot pairs would allow it to have the economies of scale to compete as a significant player in the U.S.-Tokyo market instead of having to compete from a position of relative weakness against entrenched incumbents. Although Hawaiian believes the award of (1) slot pair will be a commercial success for Hawaiian, the award of an additional slot pair would allow it to compete more vigorously against the incumbents. In awarding Hawaiian one (1) slot pair, the Department recognized that introducing a new entrant is important, but it did not discuss the economies of scale that would enable a new entrant to offer a more robust alternative to the alliance carriers.

Counsel: Hawaiian and Dow Lohnes, Jonathan Hill, 202-776-2000


May 17, 2010

Objections of United Air Lines - Bookmarked

The evidence in this proceeding clearly demonstrates that, in terms of providing benefits for the US traveling and shipping public, United's non-stop service between San Francisco and Haneda is the best overall proposal submitted by any applicant - and certainly is superior to Hawaiian's proposed HND service from Honolulu and Delta's proposed HND service from Detroit and Los Angeles. Therefore, United urges the Department to reconsider its tentative decision and issue a final order awarding United the single slot pair it has requested for SFO-HND service in preference either to Hawaiian's service at Honolulu or to one of Delta's service options from Los Angeles and Detroit.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6000


February 18, 2010

Re: Governor of Guam in Support of Continental Micronesia

By: Felix Camacho


Letters in Support of Continental Airlines:

Congressman Emeritus Robert Roe
Mayor of City of Charlotte
Mayor of City of Houston
New Jersey General Assembly Majority Leader
New Jersey State Senator Nicholas Scutari


May 17, 2010

Re: Opposition Comments of Congresswoman Madeleine Bordallo (Guam)

I write to express my strong opposition to the Department of Transportation's tentative allocation of newly available flights from Haneda to the United States. The reasoning laid out in the Order to Show Cause of May 7, 2010 is flawed in a number of ways. First, the Department has not given adequate consideration to the merits of Continental Micronesia's proposal to operate service from Haneda to Guam and in fact has ignored one of the main benefits such a route would provide. Second, the criteria used to award the first available flight pairing provide a stronger basis to select Continental Micronesia's application than Hawaiian Airlines. Third, the Department's decision to allow Delta Airlines to operate between Haneda and Detroit would provide little significance to the overall flying public without connection services to other Asian destinations.

By: Madeleine Bordallo


May 18, 2010

Objections of San Francisco International Airport

San Francisco International Airport respectfully objects to the tentative findings and conclusions of the Department of Transportation in the above-referenced Order, which effectively deny SFO's request for nonstop US carrier service to Haneda, Tokyo's convenient downtown airport. SFO submits that the Department erred in downplaying the most critical public interest objective - enabling US service where it is most needed and most effectively provided to the most US travelers - in favor of elevating "a variety" of "diverse objectives" as the basis for awarding these important services to gateways other than the Bay Area.

By: SFO, Kandace Bender, 650-821-5000



May 24, 2010

Answer of American Airlines to Objections

United - United’s objections focus on Delta and Hawaiian Airlines. However, in a footnote, United “takes issue” with (but does not object to) the Department’s “asserted” justification for its tentative award to American. United’s potshot is without merit. Clearly American should have access to Haneda in order to promote balanced interalliance competition among the three global alliances. The Department correctly found that Star and SkyTeam “hold significant positions” in the US-Asia and US-Japan markets, and thus a Haneda award to American “should enhance alliance competition by improving the competitive posture of American and oneworld."

Hawaiian - In its 4-page paper, Hawaiian Airlines argues generally in support of its proposal to operate two daily flights between Honolulu and Haneda. But Hawaiian does not specifically object to American’s JFK-Haneda award, and thus provides no reason for the Department to overturn it.

Continental - Continental’s objections "do not contest the basic awards" but instead take the Department to task for not granting backup authority. However, if the Department now accepts Continental’s position on this point and does decide to award backup rights, American would not object, since we have no intention of leaving the JFK-Haneda route unserved, and the issue would be effectively moot.

Counsel: American, Carl Nelson, 202-496-5647


May 24, 2010

Answer of Delta Air Lines to Objections

The Department’s selection of Detroit-Haneda and Los-Angeles-Haneda is supported by the record. There is nothing in the Objections of United, Continental or Hawaiian that would justify any changes to the findings and conclusions of the Show Cause Order. Delta respectfully requests that Department confirm its decision in a Final Order, which will enable the selected carriers to establish the necessary facilities at Haneda and begin advance marketing efforts to ensure the successful start of these important new services.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184


May 24, 2010

Answer to Objections by Delta Master Executive Council of ALPA

The Delta Master Executive Council, the Delta chapter of the Air Line pilots Association, International strongly supports the Department of Transportation’s tentative decision to select Delta to provide service from Detroit and Los Angeles to Tokyo’s Haneda Airport. Objections to the Show Cause Order were filed by United, Continental and Hawaiian. None of those applicants has established any basis to disturb the Department’s well-reasoned decision. Accordingly, the Delta MEC urges that the Department’s tentative findings be confirmed in a Final Order.

Counsel: ALPA, Donald Moak


May 24, 2010

Consolidated Answer of Hawaiian Airlines - Bookmarked

Hawaiian applauds the Department for tentatively awarding one (1) slot pair to Hawaiian to institute daily HNL-HND service. The Objections raised by other parties and commentators in this proceeding to the Order have raised no issues that would suggest, no less require, the Department to change it decision as to Hawaiian's first requested flight between Honolulu and Haneda. Neither have the Objections addressed or rebutted Hawaiian's Objections to the Order. Based upon the record before the Department, the Order should be affirmed as to Hawaiian's first flight and the Department should award Hawaiian an second slot pair for its second proposal for service between Honolulu and Haneda.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000



Letters in Support of Continental Micronesia:

AB Won Pat International Airport


Letters in Support of Delta Air Lines:

Michigan House of Representatives


Letters in Support of Hawaiian Airlines:

Hawaii State Senate




Order 2010-7-2
OST-2010-0018

Issued and Served July 6, 2010

Final Order

By this Order, we make final our tentative findings and conclusions set forth in Order 2010-5-7, and allocate four available slot pairs for daily scheduled combination services between the United States and Tokyo’s Haneda Airport, as follows: 1) one slot pair to Hawaiian Airlines, Inc. for its proposed Honolulu-Haneda service; 2) two slot pairs to Delta Air Lines, Inc. for its proposed Los Angeles-Haneda and Detroit-Haneda services; and 3) one slot pair to American Airlines, Inc. for its proposed New York (JFK)-Haneda service. We also make final our tentative decision not to award backup authority in this case.

We fully considered United’s assertion that its San Francisco-Haneda proposal offers the strongest combination of local and connecting service at both ends of the route and would benefit more US-originating passengers than would any of the other proposals at issue. In formulating our tentative decision, however, we determined that Delta’s Los Angeles proposal represented the most compelling west coast gateway option. It would maximize public benefits by providing service in the largest west coast and mainland US-Tokyo market, and would do so while providing more capacity than would the other west coast proposals, and while offering connecting opportunities to Tokyo traffic from the western United States. Selection of a second west coast service would undermine our ability to address the diversity of objectives we had identified, namely: the introduction of new competition in the US-Tokyo market; the need for US-Haneda service in the largest mainland US-Tokyo O&D markets; the need to provide a large central and eastern US catchment area with convenient Haneda service through a proven US-Asia hub; and, the benefit of enhancing alliance competition in the US-Tokyo and US-Asia markets.

We have considered the arguments of Continental and Continental Micronesia with respect to backup authority and are not persuaded to alter our tentative decision. The record in this proceeding indicates that the selected carriers are committed to inaugurating their US-Haneda services in a timely manner. Furthermore, as we also stated in our tentative decision, should any of the selected carriers not begin its proposed services, the public interest would be best served by allowing us to award any unused rights on the basis of a fresh record.

By: Susan Kurland

DOT Press Release - July 6, 2010



September 7, 2010

Motion of Delta for a 30-Day Start-Up Extension

In its Final Order, the Department recognized that unique factors associated with the re-opening of Haneda to international service and the effectiveness of open skies could impact carriers’ ability to introduce new service, and in light of these considerations the Department would be sympathetic to requests for modified start-up dates. Order 2010-7-2. The modest 30 day extension requested by Delta will have no impact on the long-term benefits of its services -- but will greatly assist Delta’s ability to effectively market and successfully introduce its new Haneda service once open skies is in effect.

As required by Order 2010-7-2, Delta is planning to commence Haneda service in late January, so as to maximize advance sales and marketing opportunities after open skies is expected to enter into effect. However, this places the planned startup date in the lowest demand period of the year, where it is certain to incur substantial and otherwise avoidable startup losses.

With two new B-747-400 services, Delta will be introducing substantial new capacity with more than 800 new daily nonstop seats per day each way to the US-Tokyo market. By starting service just 30 days later, Delta’s new service will benefit from this important seasonal upswing in Tokyo traffic. Delta believes it makes good public interest sense to introduce new service and capacity when there is public demand to support the flights. However, Delta reiterates that it will meet any startup condition required by the Department.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184



September 15, 2010

Answer of Hawaiian Airlines

Hawaiian Airlines, Inc. submits this Answer in response to the Motion of Delta Air Lines, Inc. for a 30-day Startup Extension filed on September 7, 2010 in the above-captioned docket. Pursuant to the Department of Transportation's Order in this docket, Order 2010-7-2, Delta is required to commence service to Haneda in late January. Delta requests a 30-day extension of that January deadline so that it may begin service during a higher demand period. Hawaiian does not oppose the 30-day extension of the startup deadline requested by Delta. However, should any protracted delays arise, Hawaiian stands ready and willing to fully utilize a second slot pair through second-daily Honolulu-Haneda service.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000



Filed September 7, 2010 | Approved September 27, 2010

Approval of Motion

We grant Delta's request for a 30-day extension to the startup condition imposed by Order 2010-7-2 requiring that Delta begin its Detroit-Haneda and Los Angele's-Haneda services within 90 days of October 31, 2010. Therefore, we now require Delta to begin its services no later than March 1, 2011. We note that Hawaiian Airlines, Inc. filed an answer stating that it does not oppose Delta's request but is prepared to operate a second Honolulu-Haneda service should any protracted delays arise with Delta's startup.

By: Robert Finamore



December 20, 2010

Motion of American Airlines for 28-Day Start-Up Extension

American Airlines, Inc. hereby requests a 28-day startup extension, from January 31, 2011 until March 1, 2011, to inaugurate daily nonstop service between New York JFK and Tokyo International Airport at Haneda.

The route was awarded to American by Order 2010-7-2, July 6, 2010, with a start-up deadline “within 90 days of October 31, 2010,” or January 31, 2011. The modest extension we are seeking will allow American to more efficiently plan, market, and implement the new service just a month after the current January 31 requirement.

The January 31 date would call for start-up in the depths of the off-peak season, and unless extended would result in an otherwise avoidable revenue penalty. February is the lowest demand month for Mainland US-Tokyo travel.

Order 2010-7-2 also awarded US-Haneda authority to Delta Air Lines, subject to the same January 31 start-up deadline. On September 7, 2010, Delta requested a 30-day extension which the Department granted in this docket on September 27, 2010. American is asking for equivalent relief.

Counsel: American, Carl Nelson, 202-496-5647



December 21, 2010

Answer of Hawaiian Airlines

Hawaiian Airlines, Inc. submits this Answer in response to the Motion of American Airlines, Inc. for a 28-day Startup Extension filed on December 20, 2010 in the above-captioned docket. Pursuant to the Department of Transportation's Order in this docket, Order 2010-7-2, American is required to commence service to Haneda in late January. American requests a 28-day extension of that January deadline so that it may begin service during a higher demand period. Hawaiian does not oppose the 28-day extension of the startup deadline requested by American. However, should any protracted delays arise, Hawaiian stands ready and willing to fully utilize a second slot pair through second-daily Honolulu-Haneda service.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000



December 28, 2010

Polling Results of American Airlines

American Airlines has completed its poll of the carrier parties served with our motion of December 20, 2010 for a 28-day start-up extension (until March 1, 2011) on the New York (JFK)-Tokyo (Haneda) route.

We have received non-objections from each of the carrier parties we served. We request expedited approval of our motion.

Counsel: American, Carl Nelson, 202-496-5647



Filed December 20, 2010 | Approved December 29, 2010

Department Action on Motion of American Airlines

We grant American's request for a brief extension to the startup condition imposed by Order 2010-7-2 requiring that American begin its New York (JFK)-Haneda service within 90 days of October 31, 2010. Therefore, we now require American to begin its services no later than March 1, 2011. We note that Hawaiian Airlines, Inc. filed an answer stating that it does not oppose American's request but is prepared to operate a second Honolulu-Haneda service should any protracted delays arise with American's startup.

We acted on this application without awaiting expiration of the answer period, as no party objected to the applicant's request

By: Thuy Cooper



March 29, 2011

Application of United Air Lines and Continental Airlines for Award of Back-Up Authority

Delta, which operates a hub at Tokyo Narita Airport, was awarded slots allowing it to operate daily services between Haneda and both Los Angeles and Detroit. It proposed to start services with B747 equipment on October 31, 2010, or within 120 days of the effectiveness of the MOU.

On or about March 17, 2011, Delta announced that it was suspending all service at Haneda effective March 24, 2011. Delta’s suspension of Haneda service will reportedly end as late as early June, which is a few days short of the 90 days that would constitute an abandonment of the service.

To avoid any risk to Haneda the Department should act immediately to name Continental and United as back-up carrier in the event that Delta (or any other Haneda-authorized US carrier) decides to abandon service at Haneda. The back-up authority should be awarded to “Continental Airlines, Inc. and/or United Air Lines, Inc.” consistent with all other authority issued and reissued to the carriers for the transitional period until their operations and service are combined as a single carrier. Depending on what Haneda services are abandoned and how many slots are available, Continental and United are prepared to start daily services using equipment consistent with the Guam, New York/Newark or San Francisco services they proposed in this proceeding. Such slots as become available should be authorized subject to the start-up and dormancy conditions normally applicable to back-up authority in limited-entry markets. As the events since the Department’s awards have demonstrated, the lack of a back-up carrier for Haneda services creates the risk of a substantial loss of the value to the public of these hard won economic assets if any of the carriers awarded slots in this proceeding ceases its service or services. It took over a year from the start of this proceeding to the start of service between the mainland U.S. and Haneda under the awards made by the Department. Without a back-up carrier in place, if any of the incumbents abandons its Haneda service, there will inevitably be a significant delay in selecting a replacement. This will lead directly to a loss of much needed Haneda service and the economic value of these scarce assets to the US economy, a loss that will be particularly harmful to the competitive position of the US carrier industry if reciprocal services by Japanese carriers continue. It would be contrary to sound foreign economic policy to allow such a situation to occur.

Counsel: Jeffrey Manley, 301-229-8571 for United / Thomas Bolling, 713-324-5606 for Continental



March 31, 2011

Answer of Delta Air Lines

Delta answers in opposition to United’s application for backup authority to Delta’s US-Haneda services. Japan has suffered a tragedy of almost unimaginable proportions. In the aftermath of the Japanese earthquake, tsunami, and ongoing nuclear crisis, Delta temporarily suspended its two new Haneda services.

United asks the Department to reallocate Delta’s Haneda slots to United in the event that Delta “abandons” Haneda service. Delta is not abandoning Haneda service. Delta’s Los Angeles-Haneda flight resumes on June 2, and Delta’s Detroit- Haneda flight resumes on June 16 -- both in full compliance with the Department’s 90 day dormancy condition.

In its 5-page application, United does not mention the Japanese tsunami or its impact on US-Tokyo air service. Delta’s response of temporarily suspending Haneda service until the immediate effects of the disaster have abated, and resuming service in June for the summer peak is appropriate – and allowed by the Department’s Order.

Yesterday it was reported that American is taking similar action, temporarily suspending its New York (JFK)-Haneda service, and one of two Dallas/Ft. Worth - Narita flights. These service reductions equate to one-third of American’s entire US-Tokyo capacity. For its part, United has temporarily suspended its second daily San Francisco-Narita flight (originally scheduled to begin on March 26), and has removed 747 aircraft from the Chicago-Tokyo route for the entire summer season, replacing them with smaller capacity 777 aircraft.

Commercial conditions in the US-Japan market are highly unusual, and there is no record on which a reasoned public interest decision could be make to take Haneda slots from one carrier and award them to another. The Department denied United’s previous request for backup authority, because “the public interest would be best served by allowing us to award any unused rights on the basis of a fresh record.” Order 2010-7-2. Delta believes that United’s renewed effort to obtain Haneda slots through another application for backup authority is unwarranted.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184



April 7, 2011

Application and Consolidated Answer of Hawaiian Airlines

Continental and United's request that the Department award them back-up authority to all carriers awarded slots at Tokyo's Haneda Airport is unjustified and does not reflect the reality of the marketplace for service between Japan and the United States.

Delta may be using the terrible events in Japan as a convenient excuse to suspend its service to Haneda and funnel as much traffic through Narita as possible, thereby reducing its cost per passenger at Narita and also reducing its costs by eliminating, even for a short period, its costs of providing service that competes directly with its Narita servìce. This information also explains, at least in part, Delta's decision to downsize its aircraft on its flights to Haneda by 160 seats, although Hawaiian notes that even with smaller aitcraft capacrty, Delta would still have low load factors on those flights.

Reallocating the slot rights from Delta's Los Angeles-Haneda service to United to commence San Francisco-Haneda service would make no sense. If Delta can't fiIl the seats on its flights to Haneda from Los Angeles, a large US market, it strains credulity to believe that United could filI the seats on daily flights to Haneda from San Francisco, a much smaller market.

The Department should not let these valuable and limited rights to fly to Haneda lie dormant or to be warehoused by Delta or, for that matter, American, particularly when Hawaiian is ready willing and able to add service between Haneda and Honolulu. Hawaii remains the most popular US destination for Japanese tourists - so popular that it continues to be a strong market even in the face of the disaster currently facing Japan. At a minimum, backup authority for the Haneda service currently held by Delta and American should be awarded to Hawaiian. If Delta or American do not restart service to Haneda within 90 days as required by the Order, the Department should reallocate at least one of those Haneda slots to Hawaiian.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000



April 11, 2011

Answer of Delta Air Lines to Hawaiian Airlines

Hawaiian admits that its loads on the Tokyo-Honolulu route have declined since the disaster, and every US carrier serving Tokyo from the US mainland has dramatically reduced capacity. Delta’s decision to temporarily suspend Haneda service until the immediate effects of the disaster have abated, and resume service in June for the summer peak is appropriate, and allowed by the Department’s Order.

The Department did not award backup authority in this case, because “the public interest would be best served by allowing us to award any unused rights on the basis of a fresh record.” Order 2010-7-2. Hawaiian’s efforts to secure a backup award under the current and highly unusual conditions in the US-Japan market are inconsistent with the Department’s Order.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184



June 3, 2011

Motion of Delta Air Lines

Delta respectfully requests temporary relief from the 90 day dormancy condition applicable to its seven Detroit-Haneda slots, so that Delta can manage its Detroit-Haneda flights in line with current market conditions. Delta resumes daily Detroit-Haneda service on June 16, 2011. However, due to the lingering effects of the Japanese earthquake, US-Tokyo demand remains far below normal levels and forward bookings on Delta’s Detroit-Haneda flight are unusually weak. Delta requests that the Department permit the flexibility to adjust Detroit-Haneda service levels by providing relief from the slot use-or-lose condition until June 1, 2012.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184



June 14, 2011

Answer of American Airlines

We do not oppose Delta’s motion and agree that Delta has provided compelling reasons for the Department to review the Haneda situation. However, American would like to offer a somewhat different perspective because we intend to continue our Haneda service without further interruption.

To be in the best position to do so, we are interested in extra-bilateral authorization to depart Haneda in the 2300 hour. The operating environment would substantially improve, and American’s New York (JFK)-Haneda service would have far greater prospects for long-term viability, if we could leave Haneda in the 2300 hour, which is before the midnight departure requirement in the MOU. With this proposed change, and assuming that American is able to secure the slots to support it, we feel that JFK-Haneda will have a substantially better chance of succeeding.

As the Department considers Delta’s request for a dormancy waiver (which would permit Delta to suspend service), the Department should at the same time consider American’s request to adjust the Haneda departure window in order to help American to maintain service.

Counsel: American, Carl Nelson, 202-496-5647


June 14, 2011

Answer of Hawaiian Airlines

Delta has asked the Department to grant it authority to stop and start the service at its discretion, calling for what appears to be unlimited “flexibility” in providing its proposed service between Detroit and Haneda. Conversely, Hawaiian has upheld the commitments it made in the route proceeding by initiating its Haneda service without delay and maintaining that service since its inception. In addition, consistent with its application for initial approval of the Haneda routing, Hawaiian remains willing to add an additional frequency between Haneda and Honolulu starting in December 2011. Hawaiian therefore opposes Delta’s third Motion for delay and requests that it be denied, while also requesting that the Department award the Haneda-Detroit frequency to Hawaiian for the additional Haneda-Honolulu service.

Hawaiian is sufficiently optimistic about the Japanese market's acceptance of its service that on July 12, 2011 it will initiate service to its second city in Japan, Osaka, and is prepared to inaugurate a second flight in the Haneda-Honolulu market by year's end. Hawaiian's commitment to the Japanese market during these difficult times should be rewarded with the reallocation of a second daily slot pair for service between Haneda and Honolulu.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


June 14, 2011

Answer of United Air Lines

Delta has not been providing Detroit-Haneda service since March, and it apparently has no plans to provide the B-747-400 service it promised in this proceeding. Nonetheless, Delta has asked the Department to extend for another 12 months Delta’s ability to waste the slots-- a valuable public resource -- it secured for Detroit-Haneda service. Although Delta’s current request is based on the extraordinary consequences of the earthquake, tsunami and nuclear power plant damage in Japan, long before that tragedy Delta sought and received authority to delay the institution of service. When Delta did institute service, it ceased after approximately one month. In light of Delta’s continuing failure to provide the Haneda service it proposed, the Department should withdraw Delta’s slots for daily Detroit-Haneda service and award them to United so it can offer daily nonstop B-777 San Francisco-Haneda service just as it proposed originally in this proceeding.

Counsel: United, Steve Morrissey, 202-296-2337



June 17, 2011

Motion for Leave to File and Reply of Delta Air Lines

None of the responding carriers dispute the factual basis of Delta’s motion. American does not oppose Delta’s motion. In fact, American “agree[s] that Delta has provided compelling reasons for the Department to review the Haneda situation.”

Hawaiian attempts to use the current distressed market conditions affecting mainland US business markets to argue for a second pair of Haneda slots for Honolulu-Tokyo service. While beach market demand from Tokyo may have been less disrupted than mainland markets in the short term, that does not alter the validity of the Department’s decision to award slots for mainland service. Delta’s Detroit hub provides comprehensive coverage of the major Eastern US business markets -- and promotes SkyTeam’s ability to compete with the Star and oneworld alliances at Haneda.

If the Department wants to authorize additional Haneda beach market flying in the interim, Delta is prepared to provide that service. Delta was also an applicant for Honolulu-Haneda service, but, unlike Hawaiian, Delta did not receive any slots for Honolulu. This places Delta at a disadvantage against its major rivals in the Tokyo-Honolulu market, including JAL and ANA, both of which use their Haneda slots to serve Honolulu. For years, Hawaiian has eschewed the opportunities that were provided for it to begin Tokyo service at Narita, and Hawaiian continues to be interested in adding service only at the preferred downtown airport.

United criticizes Delta for making adjustments to its Haneda capacity and reducing service in the face of reduced demand following the earthquake. Yet, that is exactly the type of market-based decision carriers are entitled to make under open skies. We note that United also reduced capacity in numerous US-Tokyo markets in response to the earthquake, including Chicago-Tokyo (adjacent to Detroit) and San Francisco-Tokyo.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184



June 27, 2011

Reply of Hawaiian Airlines

In its response to the request of Delta Air Lines, Inc. to waive the donnancy requirements of Order 2010-7-2, American sought extra-bilateral relief with respect to the timing of departures at Haneda Airport. Hawaiian also is concerned about several bilateral issues relating to operations at Haneda that would be associated with earlier departures, including, among other things, the allowance of earlier arrivals at Haneda.

If the Department decides to raise the issues American has presented with the Government of Japan, it should also raise Hawaiian's concerns.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000



Filed June 3, 2011 | Issued June 29, 2011

Notice of Action Taken

We have decided to grant the request of Delta for a dormancy waiver until June 1, 2012.

When we selected Delta’s Detroit-Haneda proposal, we did so because we concluded that Delta’s proposal would provide important public interest benefits. Significantly, we noted that Delta’s service would provide a large central and eastern US catchment area with convenient access to Haneda through a proven US-Asia hub. Following a brief startup delay, Delta introduced and operated this new service. Then, within a month of that introduction, a catastrophic natural disaster with a comparably catastrophic aftermath occurred in Japan and seriously disrupted traffic. In light of these extraordinary circumstances, we do not find Hawaiian’s or United’s objections, including their proposals for a replacement US-Haneda service, proposals that were previously considered and not selected in the 2010 proceeding, sufficiently compelling as to cause us to now forgo the anticipated public benefits of Detroit-Haneda service. We recognize that these benefits might be somewhat delayed under the flexibility we are granting Delta and that there might be some cost in terms of permitting available bilateral rights to go temporarily unused. However, on balance, we have determined that, in the circumstances presented, those costs do not outweigh the value of preserving the anticipated benefits of Detroit-Haneda service and therefore do not warrant replacement of Detroit with an alternative US gateway for Haneda service.

We will therefore grant Delta relief, until June 1, 2012, from the 90-day dormancy condition applicable to its Detroit-Haneda slot pair. Specifically, we will require that Delta resume Detroit-Haneda service no later than June 1, 2012. We point out, however, that given the limited opportunities that currently exist at Haneda and the interest of other carriers, delay beyond that date might not be in the public interest and any future request for relief would be critically evaluated accordingly.

By: Susan Kurland



June 30, 2011

Motion of American Airlines for Dormancy Waiver

American Airlines, Inc. respectfully requests temporary relief from the 90-day dormancy provision applicable to our New York (JFK)-Haneda slots so that American can manage JFK-Haneda service in line with current market conditions. While American is resuming daily service in this market on July 1, 2011, US-Tokyo demand remains far below normal levels due to the lingering effects of the Japanese earthquake, and forward bookings on our JFK-Haneda flights are weak. We request that the Department grant us the flexibility to adjust JFK-Haneda service levels by waiving the 90-day dormancy condition until June 1, 2012.

By Notice of Action Taken in this docket on June 29, 2011, the Department granted Delta Air Lines, Inc. a waiver of the 90-day dormancy condition applicable to Detroit-Haneda slots until June 1, 2012. We are asking for equivalent relief.

Counsel: American, Carl Nelson, 202-496-5647



July 12, 2011

Answer of United Air Lines

American began serving the New York (JFK)-Haneda route on February 18, stopped serving the route altogether in April, and resumed service only on July 1, but it has already asked the Department to give American the ability to "temporarily reduce or suspend service" using the Haneda slots it secured based on a commitment to offer daily nonstop service. The tragic events in Japan have adversely affected Japan, US-Japan traffic and the airlines that serve Japan. Although American's dormancy waiver request is based on the extraordinary consequences of the earthquake, tsunami and nuclear power plant damage in Japan, American sought and received authority to delay the institution of service between New York (JFK) and Haneda well before the earthquake and tsunami because starting its proposed service in January would have been uneconomic. If the Department is not prepared to withdraw American's slots for daily New York (JFK)-Haneda service, it should, at the very least, limit any dormancy waiver to the period ending June 1, 2012, and offer United the opportunity to seek American's New York (JFK)-Haneda rights if American seeks a further extension of its dormancy waiver.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2500



July 7, 2011

Comments in Support by Wayne County Airport Authority

On behalf of the Wayne County Airport Authority, operator of Detroit Metropolitan Airport and Willow Run Airport, we applaud you and your department for granting Delta Air Lines' petition for relief from the 90-day "use it or lose it" condition of its authorization to fly nonstop between Detroit and Tokyo's Haneda Airport.

As the Department noted in its answer to Delta, this decision will enable Delta to respond to market conditions in Japan following the catastrophic natural disaster while protecting access from the US Midwest to this important market as conditions improve. We also appreciate that, in granting Delta's request, the Department recognized the strength and importance of Detroit Metro Airport as "a proven US-Asia hub".

By: Genelle Allen



Filed June 30, 2011 | Issued July 21, 2011

Notice of Action Taken

Waiver of the 90-day dormancy condition applicable to its New York (JFK)-Haneda slot pair, as follows:

American requests that the Department permit it the flexibility to adjust New York (JFK)-Haneda service levels by granting American relief, until June 1, 2012, from the 90-day dormancy condition applicable to its New York (JFK)-Haneda slot pair.

American states that the effects of the Japanese earthquake continue to have a severe negative impact on US-Tokyo demand. American seeks flexibility to temporarily reduce or suspend service and to manage re-introduction of service in time for the 2012 peak travel season. American states that its waiver request is consistent with the public interest as well as with Department precedent and policy under unusual and distressed market conditions. American specifically cites our recent action granting Delta a dormancy waiver for its Detroit-Haneda service until June 1, 2012.

By: Paul Gretch


 

July 30, 2012

Motion of Delta Air Lines

Delta requests permission to move its Detroit-Haneda slots to the Seattle-Haneda route. These slots were awarded by Order 2010-7-2, and are currently limited to service at Detroit. Delta moves the Department to amend the Order to allow Delta flexibility to operate from the Seattle gateway.

The marketplace has indicated that Delta’s Detroit-Haneda slots would be better utilized at Seattle. Based on its actual operating experience, Delta has found that Eastern US-Haneda service is under performing relative to the West Coast-Haneda service. Seattle is the largest US-Tokyo market without nonstop Haneda service. Seattle’s West Coast location also allows for a more attractive and consumer friendly schedule that is a better fit with the Haneda operating window. Delta’s network at Seattle, together with its codeshare partner, Alaska Airlines, provides convenient and non-circuitous connections to scores of US cities.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184


 

July 31, 2012

Answer of American Airlines to Motion of Delta Air Lines for Flexibility to Change Gateways

American has no objection to Delta’s request provided that all carriers holding Haneda slots are granted equivalent relief.

In 2004, the Department reached that result regarding Brazil frequencies. See Order 2004-6-25 (“We have decided to grant [Delta’s] request [to remove city-pair restrictions] and to afford the same flexibility to all four designated combination carriers for US-Brazil service”). If Delta is granted flexibility to move its Haneda slots to another gateway, the other US carriers operating to Haneda should be permitted to change gateways as well as market conditions warrant.

Counsel: American, Carl Nelson, 202-496-5647


 

August 3, 2012

Answer of United Air Lines to Motion of Delta Air Lines

Despite the Department's selection of Delta to operate daily nonstop Detroit-Haneda and Los Angeles-Haneda B-747 service by Order 2010-7-2, Delta has failed to deliver on the commitments in its Haneda service proposal over the last two years, and granting its request to now move one of its US gateways from Detroit to Seattle (see Motion of Delta filed July 30, 2012 in this docket) would further perpetuate the inefficient use of these scarce, highly valuable Haneda slots. United therefore urges the Department to deny Delta's request and instead allocate one daily pair of US-Tokyo Haneda combination slots for United to provide scheduled foreign air transportation of persons, property and mail with its own aircraft between San Francisco and Tokyo Haneda. Moreover, United is ready, willing and able to commence daily nonstop San Francisco-Haneda service within 90 days of the Department's allocation.

Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2500


 

August 6, 2012

Answer of Hawaiian Airlines to Motion of Delta Air Lines

Hawaiian finds Delta’s request to move its Detroit service to Seattle without merit and completely counter to the carefully crafted distribution of frequencies established by DOT in the Order. The granting of Delta’s present request to move from its Detroit hub, that it represented to DOT would provide well established and dependable benefits, would undo the carefully crafted distribution of frequencies set forth in the Order.

Hawaiian remains committed to increasing its frequencies to Haneda. Should a new selection proceeding be initiated, Hawaiian will actively participate to win that second frequency.

American Airline’s “me too” pleading filed in this docket would further clearly undermine that balance established by DOT and should not be granted.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


 

August 8, 2012

Answer of Alaska Airlines to Motion of Delta Air Lines

Alaska supports Delta’s motion to transfer its Detroit-Haneda slots to the Seattle-Haneda route. Seattle is a major hub for Alaska and is an ideal gateway for new international service to Haneda. Seattle has the natural advantage of geography, which supports consumer friendly Haneda schedules and convenient non-circuitous connections. The Alaska/Delta domestic marketing alliance will provide effective network feed, extending the benefits of Delta’s proposed Haneda flight to the Pacific Northwest region, and throughout the United States.

Counsel: Alaska Air, Kyle Levine

 

August 8, 2012

Answer of the Delta Master Executive Council of the Air Line Pilots Association in Support of the Motion of Delta Air Lines

The Delta Master Executive Council, the Delta chapter of the Air Line Pilots Association, International strongly supports the Motion of Delta Air Lines, Inc. to permit the carrier to move its daily Detroit-Haneda slot pair to the Seattle gateway. The Detroit-Haneda market has not performed as expected, and for this reason Delta has proposed that it be permitted to move the gateway to Seattle. Delta’s Motion makes the case for providing Delta the flexibility to move one of its two Haneda gateways. The MEC fully supports this Delta request.

Counsel: Delta Master Executive Council, Timothy O'Malley

August 8, 2012

Answer of the Port of Seattle in Support of Motion of Delta Air Lines

The Port of Seattle, as owner-operator of Seattle-Tacoma International Airport respectfully submits this Answer in strong support of the Motion of Delta Air Lines, Inc. to grant Delta the flexibility to utilize a weekly Haneda slot pair to operate to and from the Seattle gateway. Delta's new service will be received enthusiastically by the Seattle-based traveling public, as well as that of the Pacific Northwest and the broad US catchment area served through Seattle. Seattle believes Delta's Motion is in the public interest and Seattle urges it be favorably acted upon on an expedited basis.

Counsel: Port of Seattle, Isabel Safora, 206-787-3216



August 8, 2012

Letters in Support of Motion of Delta Air Lines
Washington Congressional Delegation, Governor of Washington

 


 

August 9, 2012

Consolidated Response of Delta Air Lines

Delta is a strong competitor in the US-Tokyo market, but faces unique challenges at Haneda, because Delta is the only major alliance carrier without a Japanese ATI partner operating at that airport. Haneda is heavily dominated by the hub operations of ANA (Star), and JAL (oneworld). To maintain effective competition at the Haneda airport, it is very important that Delta be allowed to maintain its Haneda slots and improve its service offering by operating at the Seattle gateway.

While Delta believes that the Department would be well justified in approving Delta’s flexibility request on the basis of the existing record, Delta stands ready to demonstrate the merits of its Seattle proposal in any further carrier selection proceedings that the Department deems necessary.

American states that if gateway flexibility is granted Delta, other carriers serving Haneda should be permitted to change gateways based on prevailing market conditions. Delta has no objection were the DOT to take this approach and authorize all Haneda carriers the flexibility to assign Haneda slots to the best gateway as determined by each carrier.

Hawaiian states that the Delta motion should be denied, and indicates its desire to seek additional slots for Haneda-Honolulu service. At this stage, Delta would simply note that Hawaiian has unlimited open skies authority to provide Honolulu-Tokyo service (at Narita), but Hawaiian appears interested only in serving the limited entry airport. Delta is prepared to demonstrate why maintaining effective alliance competition through its Seattle proposal is a superior public interest choice.

United would have the Department ignore the fact that United is in an immunized joint venture arrangement with ANA, the carrier with the single largest hub operation at Haneda. ANA is free to use its Haneda slots to serve any gateway in the US -- and to that extent United has unparalleled flexibility to offer Haneda service to its customers at San Francisco or any other gateway of its choosing through its partner ANA. United, however, states that it seeks to serve Haneda “with its own aircraft” as if the concept of metal neutrality had no meaning.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


 

Order 2012-8-20
OST-2010-0018

Issued and Served August 17, 2012

Order Instituting Proceeding

By this order, we institute a proceeding to determine if it is in the public interest to grant the motion of Delta Air Lines, Inc. to move its Detroit-Haneda slot pair for scheduled combination services to the Seattle-Haneda route, or whether the public interest instead calls for an alternative use of that slot pair.

We are establishing the following procedural schedule for submissions:

Petitions for Reconsideration August 24, 2012
Answers to Petitions August 29, 2012
Applications/Supplements/Amendments August 27, 2012
Answers September 6, 2012
Replies September 13, 2012

By: Susan Kurland


 

August 27, 2012

Application of American Airlines for Allocation of One Daily Slot-Pair

American Airlines, Inc., in response to Order 2012-8-20, August 17, 2012, hereby applies for allocation of one daily US-Haneda slot pair to operate year-round scheduled foreign air transportation of persons, property and mail between Los Angeles, California and Tokyo (Haneda), Japan starting within 90 days of the Department’s final order in this proceeding.

American proposes to operate 247-seat B777 aircraft (16F/37C/194Y) to Haneda.

Counsel: American, Francis Heil, 202-496-5642


August 27, 2012

Application Supplement of Delta Air Lines

In the original Haneda proceeding, the Department declined to consider the competitive impacts of the US-Japan immunized alliances on the Haneda awards, because those applications were pending and not yet granted. There is no longer any doubt that United/ANA and American/JAL have full immunity and must be considered as a single competitive entity. The Department accepted the elimination of all competition between the United-ANA and the American-JAL networks on the theory and expectation that the ATI alliances would generate metal neutral joint venture benefits. United and American should be expected to access Haneda though the metal-neutral transpacific JV flights and hub networks operated by their Japanese partners. Such efficiencies are the fundamental public interest rationale for granting and maintaining antitrust immunity.

By contrast, Delta stands as an independent competitor and the sole network challenger to the Star and oneworld immunized alliances on US-Haneda, US-Japan and US-Asia routes. It is important that healthy 3-way alliance competition be preserved. Accordingly, it is in the public interest to grant Delta’s request to make the best and most effective use of its limited Haneda slots by using them at the Seattle gateway.

Counsel: Delta, Sascha Van der Bellen, 202-842-4184


August 27, 2012

Application of Hawaiian Airlines

Hawaiian proposes to initiate daily nonstop flights between Tokyo Haneda and Kona International Airport. A total of seven round-trip frequencies will be used each week with service between Kona and Haneda. Service would begin on a date specified by the Department, so long as such a date provides reasonable opportunity for advance selling of the new service. Hawaiian proposes that service should begin on or about March 15, 2013. Hawaiian intends to operate its proposed flights with new Airbus 330-200 aircraft.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


August 27, 2012

Application of United Air Lines - 27MB

United applies for one daily pair of US-Tokyo Haneda combination slots to provide scheduled foreign air transportation of persons, property and mail between San Francisco and Tokyo Haneda. United's proposal will provide convenient daily nonstop flights between United's hub at San Francisco International Airport and close-in Tokyo Haneda airport to the benefit of passengers traveling in the large local San Francisco-Tokyo market as well as passengers traveling between points served behind United's San Francisco hub network and Tokyo Haneda - and maximize the use of these scarce, valuable Tokyo Haneda slots that have been underutilized. United's proposed San Francisco-Haneda flights will enable it to provide US-Tokyo Haneda service through its San Francisco hub with its own US aircraft and crews and complement United's daily San Francisco-Tokyo Narita operations, which will continue to operate and offer alternative time of day departures and arrivals as well as service for passengers who prefer service at Tokyo Narita or are making connections there.

United currently operates two daily flights during the summer between San Francisco and Tokyo Narita and one daily flight during the winter. United would continue to operate at least one daily Tokyo Narita flight year-round if awarded the requested Tokyo Haneda slots.

The United B-777 aircraft to be used on .the proposed Tokyo Haneda services currently operate with 269 seats (8 GlobalFirst, 40 BusinessFirst and 221 economy). United anticipates holding one GlobalFirst seat for crew rest for its proposed Tokyo Haneda operations.

Counsel: Crowell & Moring, Lorraine Hallowy, 202-624-2500


August 28, 2012

Corrected Exhibit of United Air Lines

United hereby submits the attached Exhibit UA-106 to its Application filed on August 27, 2012 in this docket to rectify a data pull problem.

Counsel: Crowell & Moring, Gerald Murphy, 202-508-8855


 

August 24, 2012

Answer of Alaska Airlines Master Executive Council of the Air Line Pilots Association, International in Support of Delta Air Lines

On behalf of the 1,443 pilots at Alaska Airlines, we are writing support Delta Airlines' motion to transfer its Detroit-Haneda slots to the Seattle-Haneda route. Seattle is an ideal gateway for new, non-stop service to Haneda. Seattle currently is the largest US-Tokyo gateway without non-stop service to Haneda, which puts Seattle at a disadvantage to other West Coast cities like San Francisco and Los Angeles. Delta's request will directly benefit passengers in the Pacific Northwest, and will enhance West Coast competition for US-Haneda passengers.

By: Chris Notaro


 

September 5, 2012

Answer of Alaska Airlines

Alaska answers and reaffirms its strong support for Delta’s proposal to offer the first Seattle-Haneda nonstop service by transferring its two Detroit-Haneda slots to the Seattle gateway. The Department’s instituting order states that its proposed objective is to select the gateway that will provide the maximum public benefits and the greatest convenience to travelers and shippers. Delta’s proposed Seattle-Haneda service, combined with Alaska’s ability to provide substantial traffic support for that service, make the Seattle gateway far superior to the other proposed alternative gateways.

Alaska supports Delta’s nonstop Seattle-Haneda proposal because:

Alaska has a major hub presence at Seattle from which Alaska serves 70 cities in the US, Canada and Mexico.

  • Seattle is the largest US mainland city without nonstop service to Haneda, the close-in and increasingly preferred Tokyo Airport.
  • Seattle enjoys a geographic advantage as the most direct and least circuitous gateway to Tokyo for broad expanses of the US.
  • Alaska connected 200,000 passengers at Seattle to Delta’s international flights under the longstanding Alaska-Delta marketing alliance. The addition of a nonstop flight between Seattle and Haneda will increase Alaska’s international connecting traffic.
  • Alaska’s extensive Seattle network will offer much improved service benefits to connecting Tokyo passengers from no fewer than 40 cities.
  • Alaska and its employees will benefit from the increased traffic and operational levels flowing from the opportunity to connect Alaska’s Seattle network to the first Seattle-Haneda nonstop service.
  • Los Angeles and San Francisco already receive Haneda nonstop service. Authorizing Delta to provide the first Seattle-Haneda nonstop service will greatly enhance West Coast-Japan intergateway competition, as well as enhance competition among the major global alliances.

Alaska welcomes the Department establishing an expedited schedule for reaching a final decision in this selection proceeding. Seattle is the largest US mainland city without nonstop service to Haneda. Haneda’s close-in proximity to Tokyo makes Haneda the preferred airport for travel to Tokyo. These considerations underscore the importance of the Department’s decision to adopt expedited procedures and, for the reasons highlighted above, to select the Seattle gateway.

Counsel: Alaska Airlines, Kyle Levine


 

September 6, 2012

Answer of American Airlines

Delta - Seattle is not a Delta hub. From Seattle, Delta operates to only six Mainland cities (Atlanta, Cincinnati, Detroit, Minneapolis/St. Paul, New York and Salt Lake City). All of the other on-line service behind Seattle that Delta claims in its application is DL* operated by Alaska Airlines or Horizon Air under codeshare agreements. Delta has no control over Alaska’s scheduling decisions and thus can offer no assurance that the claimed Delta-to-DL* connections operated by Alaska via Seattle will continue to exist in the future. We cannot recall any carrier.

United - In the interest of competitive balance among the three global alliances, American’s application for Los Angeles-Haneda authority should be favored over United’s application for a San Francisco-Haneda award. See Order 2010-5-7 in this docket, p. 11 (“in the overall US-Asia market, the Star and SkyTeam alliances currently hold significant positions. Thus, an award of Haneda rights to American here should enhance alliance competition by improving the competitive posture of American and oneworld in the US-Asia market as compared to the SkyTeam and Star alliances”).

Hawaiian Airlines - Only eight US-Haneda opportunities are available under the US-Japan air transport agreement (four for US carriers and four for Japanese carriers). Three of the eight (37.5%) are already being used to serve Hawaii (HA, JAL and ANA each operates to Haneda from Honolulu). If Hawaiian were to prevail here, 50 percent of all Haneda opportunities (four of eight) and 50 percent of US carrier Haneda opportunities (two of four) would be used at a Hawaii gateway.

Counsel: American, Francis Heil, 202-496-5642


September 6, 2012

Public Answer of the Continental Master Executive Council of the Air Line Pilots Association, International in Support of the Motion of United Air Lines

Since the initial DOT slot pair awards in 2010, Delta has exercised its right to serve Tokyo Haneda from Detroit for only 9 out of 20 months. While all carriers were economically harmed by the unfortunate Tsunami events in 2011, United continued to serve Tokyo with its own aircraft and crews, displaying a commitment to the region, to US consumers and its 80,000-plus United coworkers that would undoubtedly be extended through service to Haneda.

For the foregoing reasons, the MEC strongly supports United’s request to serve Tokyo Haneda from its San Francisco hub and urges the Department to promptly deny Delta’s motion.

Counsel: ALPA-Int'l, Jay Pierce, 281-987-3636


September 6, 2012

Consolidated Answer of Delta Air Lines

Delta’s request to improve the utilization of its Haneda slots by moving them from Detroit to Seattle is clearly in the public interest. Delta’s request is also consistent with market-based principles that are fundamental to US open skies policy. Delta recognizes that the Haneda bilateral compromise creates a unique limited entry situation within the Japan open skies agreement. The Department’s current distribution of Haneda slots promotes rough parity between the alliances with Delta having two slot pairs, Star two slot pairs, and oneworld three slot pairs. However, while Delta is limited to the Haneda gateways selected in the 2010 route case, Star and oneworld have commercial discretion to select their own Haneda gateways and redeploy the Haneda slots operated by ANA and JAL under their metal neutral joint venture alliances. This flexibility, combined with the dominant incumbent hubs operated by ANA and JAL at Haneda, creates significant advantages for Star and oneworld.

The Department can improve market-based competition at Haneda – and generate important new nonstop and network service benefits – by allowing Delta the flexibility to operate from its preferred US mainland gateway at Seattle. It is both reasonable and commercially necessary for Delta to make network adjustments to improve under-performing flights. While Delta respects the regulatory requirement for this comparative selectionDelta’s request to improve the utilization of its Haneda slots by moving them from Detroit to Seattle is clearly in the public interest. Delta’s request is also consistent with market-based principles that are fundamental to U.S. open skies policy. Delta recognizes that the Haneda bilateral compromise creates a unique limited entry situation within the Japan open skies agreement. The Department’s current distribution of Haneda slots promotes rough parity between the alliances with Delta having two slot pairs, Star two slot pairs, and oneworld three slot pairs. However, while Delta is limited to the Haneda gateways selected in the 2010 route case, Star and oneworld have commercial discretion to select their own Haneda gateways and redeploy the Haneda slots operated by ANA and JAL under their metal neutral joint venture alliances. This flexibility, combined with the dominant incumbent hubs operated by ANA and JAL at Haneda, creates significant advantages for Star and oneworld.

The Department can improve market-based competition at Haneda – and generate important new nonstop and network service benefits – by allowing Delta the flexibility to operate from its preferred US mainland gateway at Seattle. It is both reasonable and commercially necessary for Delta to make network adjustments to improve under-performing flights. While Delta respects the regulatory requirement for this comparative selection proceeding, it would not be in the public interest for the Department to strip Delta of the Haneda slots it needs to compete with the US-Japan immunized alliances. The loss of a slot pair would marginalize Delta in the US-Haneda marketplace, leaving Delta with just a single daily flight to compete against the multiple daily transpacific flights and large Haneda hubs operated by Star and oneworld. This would increase market dominance by the US-Japan ATI alliances, and undermine Delta’s ability to compete in the US-Tokyo and US-Japan marketplace.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


September 6, 2012

Answer of the Delta Master Executive Council of the Air Line Pilots Association, International in Support of Delta Air Lines

Hawaiian proposes to reestablish service in the Tokyo-Kona market, which was previously served by JAL from Narita. Hawaiian does not need a further award of Haneda slots to serve the Tokyo-Kona market, since open skies opportunities exist at Narita. Hawaii already has three daily Haneda flights, which are used almost exclusively by Japanese tourists. The Delta MEC believes that Delta’s Seattle proposal will create greater benefits for US consumers seeking convenient and competitive service to Haneda.

Delta’s Seattle gateway competes for US-Tokyo passengers with the West Coast gateways of Los Angeles and San Francisco, but is at a disadvantage because Delta is currently unable to offer nonstop service between Seattle and Haneda. By granting Delta’s request the Department will maximize public benefits by enabling Delta to meet the substantial consumer demand for well-timed nonstop service between Seattle and Haneda and at the same time promote inter-gateway competition among the alliances by opening a third West Coast gateway.

JAL and ANA, which have “metal-neutral” immunized joint ventures with their US partners, have discretion to use their Haneda slots to serve any US point of their liking. Delta, which does not have a Japanese alliance partner, is at a strategic disadvantage vis-à-vis the immunized Star and oneworld alliances because it cannot move its Haneda slot pairs without the permission of the Department.

Counsel: Delta Master Executive Council, Timothy O'Malley


September 6, 2012

Letters in Support of Delta Air Lines
Washington Governor Christine Gregoire, Seattle Mayor Mike McGinn, Tacoma Mayor Marilyn Strickland and Local Elected Officials


September 6, 2012

Form Letters of Delta Employees in Support of Delta Air Lines


September 6, 2012

Consolidated Answer of Hawaiian Airlines

Any rigorous analysis of the available data leads to the inevitable conclusion that Hawaiian’s Kona-Haneda service is the best proposal for a number of reasons:

  • Kona is the only market proposed in this proceeding currently without nonstop service to Tokyo.
  • The Tokyo-Kona market is sufficiently large that it will significantly outperform all of the other Haneda gateways.
  • Of all the proposals in this proceeding, Hawaiian proposes to use the largest aircraft for its service.
  • Of all the proposals in this proceeding, Kona will generate the most domestic economic growth and jobs.

By contrast, the competing applications of Delta, American and United are deeply flawed replicas of their initial 2010 applications. The renewed applications completely ignore the lessons learned over the past two years. Undaunted by its failure to make Detroit a successful gateway and having withdrawn its Detroit schedule from the GDSs prior to the DOT’s decision in this case, Delta again has asked for authority to operate from Haneda to Seattle, a smaller market with substantial preexisting service to Tokyo. American has again applied for Los Angeles, despite its current focus on restructuring its business and the fact that its proposed service duplicates underutilized Haneda service offered by both Delta and ANA. United has again asked for San Francisco, despite JAL’s existing, duplicative and underperforming Haneda service to the airport. The proposed city pairs already are saturated with abundant service provided by the members of the Star, Skyteam and oneworld alliances, two of whom operate in metal-neutral joint ventures from both of the Tokyo airports, Haneda and Narita Airport.

The alliance carriers’ proposals are recipes for more failure. All the alliances maintain significant hubs at Narita and propose to serve mainland points on routes they already serve from Narita. They attempt to rationalize this duplicative service by promising a high volume of connecting traffic on the Haneda flights. This formula has failed for two years, and the alliances fail to explain why the Department should expect a different result going forward. In contrast, Hawaiian began service as a new entrant independent of the alliances on a route consisting mostly of local traffic. Hawaiian has delivered continuous service and flown more passengers to and from Haneda than the rest of the US carriers combined.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000

September 6, 2012

Answer of the Port of Seattle in Support of the Application Supplement of Delta Air Lines

The Port of Seattle, the owner-operator of Seattle-Tacoma International Airport, hereby answers in support of the application supplement of Delta Air Lines for authority to move one Haneda slot pair to the Seattle gateway. In the 2010 Haneda proceeding Delta indicated that Seattle was its number one priority, but unfortunately Seattle was passed over in that proceeding. Based on its experience in the marketplace, Delta now seeks to reposition its slots to the Seattle gateway to better serve its customers and compete more effectively in the US-Haneda marketplace.

Permitting Delta to serve the nonstop Seattle-Haneda market should be the Department's top priority. Seattle is the largest US-Tokyo market without nonstop Haneda service, and Seattle is currently disadvantaged relative to the San Francisco and Los Angeles gateways that have already secured Haneda service. Strong support from Seattle and the entire Pacific Northwest region for a Delta Seattle-Haneda service will ensure its long-term success.

Counsel: Port of Seattle, Isabel Safora, 206-787-3216


September 6, 2012

Answer of the San Francisco International Airport in Support of United Air Lines

San Francisco International Airport hereby answers in strong support of the application of United Air Lines, Inc. for allocation of the slots needed for daily nonstop service between SFO and Tokyo's Haneda International Airport. Having enthusiastically supported the bilateral negotiations that secured US access to Haneda in the first place, participated actively in the first round of this proceeding two years ago, and last month filed to urge re-opening the initial Department of Transportation Haneda allocation, San Francisco remains deeply committed to securing US carrier service to Haneda Airport for the Bay Area.

By: SFO, Kandace Bender, 650-821-5000


September 6, 2012

Consolidated Answer of United Air Lines

United proposes to provide new entrant Tokyo Haneda service at its San Francisco hub gateway – serving the second largest West Coast-Tokyo market. Meanwhile Delta, which has underutilized these scarce, valuable Haneda slots, seeks to control all US carrier-operated service from the West Coast by serving a second West Coast gateway with far fewer passengers and online connecting opportunities than United at San Francisco; Hawaiian proposes to serve another island gateway that would offer scant benefits to US consumers and virtually no connecting opportunities; and American proposes to serve a gateway that already receives nonstop US carrier Haneda service. United is the only applicant in this proceeding that is not currently permitted to serve Haneda with its own aircraft and crews and is thus the only applicant that can bring new competition to Tokyo Haneda. Selecting United over these Haneda incumbents will both maximize public benefits and establish competitive parity for US carriers at Tokyo Haneda.

Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2500


 

September 13, 2012

Consolidated Reply of Alaska Airlines

Alaska replies briefly to address American's and United's argument that Delta's codeshare connections to Alaska flights at Seattle are less reliable than American's and United's on-line connections at Los Angeles and San Francisco, respectively, because Delta does not have control over Alaska's connecting schedules. This argument is unavailing.

Alaska's marketing alliance with Delta is broader and more comprehensive than a traditional codeshare agreement] Alaska and Delta exchanged 200,000 intemational connecting passengers during the period ended June 30, 2012. This volume is a testament to the robust, reliable arrangements between the two carriers4 Alaska and Delta regularly adjust connecting schedules to enhance codeshare passengers' seamless travel experience.

The Department recognized in the initial 2010 US-Haneda Combination Service Proceeding the importance of the international connecting traffic levels Alaska and Delta have generated for each other at Los Angeles5 The volume of cOlmecting traffic between Alaska and Delta will be greater still at Seattle, Alaska's largest hub, to the benefit of both carriers and customers wishing to travel the least circuitous path between much of the US and Asia.

Counsel: Alaska, Kyle Levine


September 13, 2012

Reply of American Airlines

Los Angeles is the number one US Mainland O&D market to Tokyo, with two times more local passengers than San Francisco and six times more than Seattle. Global alliance competition between Los Angeles and Haneda is limited to Star (with service operated by ANA and marketed by United and US Airways) and SkyTeam (with service operated by Delta). Among the aligned US carriers, American has the least number of total frequencies between the United States and Japan. To maximize alliance competition in the largest Mainland-Tokyo market that would result in the greatest benefit to the traveling public, American and Los Angeles should be selected in this proceeding.

Counsel: American, Francis Heil, 202-496-5642


September 13, 2012

Consolidated Reply of Delta Air Lines

This is no ordinary route case. It is also a critically important case regarding the Department’s continuing public interest oversight of its antitrust immunity authority. In this case, United has made bold claims as to its status as a “new entrant competitor” at Haneda that are contrary to the “metal neutral” joint venture benefits it claimed to gain antitrust immunity with ANA. Delta believes that metal neutrality is a business model, not a concept of regulatory expedience. Delta does not consider itself an independent competitor against any of its antitrust immunized partners. United’s “new entrant” competitor claim in the face of its immunized metal neutral joint venture with ANA bears close scrutiny and should be weighed carefully in this important decision which will have a major impact on US-Haneda and US-Japan alliance competition.

The Applications and Answers filed in this proceeding present the Department with some important choices. First, whether the slots at issue should be used to establish service at a large and important new US-Haneda gateway, or whether they should be used to duplicate service in existing US-Haneda markets. Second, whether the slots should be used to preserve and enhance 3-way alliance competition in the US-Haneda and US-Tokyo marketplace, or to further strengthen the dominant US-Japan immunized alliances at the expense of the only unaligned US-Japan network competitor. Third, whether US citizens and US businesses should enjoy the important convenience of new service to Tokyo’s preferred downtown airport, or whether Japanese tourists should have a fourth Haneda flight to the Hawaiian Islands.

Delta believes the answers to these questions are clear and lead to the inevitable conclusion that Delta’s motion for flexibility to move its existing slots from Detroit to Seattle should be granted.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


September 13, 2012

Letters in Support of Delta Air Lines
Alaska DOT, Juneau Int'l Airport, Mayor of Bellevue, Spokane Int'l Airport, Eugene Airport, Boise Airport, Pocatello Airport, Great Falls Int'l Airport, Magic Valley Regional Airport and Salt Lake City Department of Airports

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


September 13, 2012

Form Letters of Delta Employees in Support of Delta Air Lines

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


September 13, 2012

Reply of the Delta Master Executive Council of the Air Line Pilots Association, International in Support of Delta Air Lines

The reasons why the assignment to Delta of the Haneda slot pair to provide nonstop Seattle-Haneda service represents the best allocation for the limited resource include:

  • American’s request to serve Los Angeles-Haneda duplicates existing service thereby diminishing the value of American’s application.
  • United’s request to serve San Francisco-Haneda is also duplicative of existing Haneda service in the market.
  • ANA is the largest hub operator at Haneda, giving the Star ATI alliance 221 slot pairs at Haneda, versus only 2 for Delta.
  • It would be unfair and detrimental to alliance competition to award United/ANA an additional slot pair at Delta’s expense. This would leave United/ANA with 3 US-Haneda opportunities versus only one for Delta.
  • The metal-neutral joint venture with ANA enables United to share in the revenue generated by Haneda flying regardless of who operates the route. Delta and its transatlantic joint venture partners routinely share revenue and swap flying opportunities to ensure that each carrier benefits within the alliance.
  • Delta is the only carrier without an immunized Japanese alliance partner. The Star and oneworld ATI alliances together control 75 percent of Haneda departures.
  • Hawaiian’s request to serve the small Haneda-Kona market would not represent the highest and best use of the slot pair and would overwhelmingly benefit Japanese tourist traffic rather than US originating passengers.
  • The Seattle-Haneda market is the largest US-Tokyo O&D market without nonstop service.
  • Awarding Delta the Haneda slot will ensure balanced inter-gateway competition between each of the west coast gateways with each having one or more Haneda flights.

Counsel: Delta MEC, Timothy O'Malley


September 13, 2012

Consolidated Reply of Hawaiian Airlines

It is clear from the four applications and subsequent answers that the Department faces a choice between just two options. It can grant Hawaiian's Kona application with fuIl confidence that, based upon the past two years' experience, the last remaining frequency to Haneda will be put to its highest and best use. This choice would confirm DOT's commitment to strengthening small carriers, increasing competition in a highly concentrated market, avoiding duplicative service proposals, creating new nonstop service, promoting economic growth, and, most importantly, awarding slots where the proposed service will be sustainable. Or, the Department can grant the application of any of the three alliance carriers - which each seek to serve markets already swollen with excess capacity. Then, with the certainty that the past two years' experience brings, the Department can look forward to a delayed start of the awarded service, followed by low load factors and repeated cancellations that ultimately will lead to either suspension of the awarded service or yet another request to change the gateway to Haneda.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


September 13, 2012

Letters in Support of Hawaiian Airlines - 20MB
Governor or Hawaii, Congresswoman Colleen Hanabusa (HI-1), Congresswoman Mazie Hirono (HI-2), Mayor of Kauai, Mayor of Hawaii, Mayor of Honolulu and Various State Representatives and Local Elected Officials

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


September 13, 2012

Reply of the Port of Seattle

The Port of Seattle, the owner-operator of Seattle-Tacoma International Airport, respectfully replies in strong support of Delta Air Lines motion to transfer one Haneda slot pair to the Seattle gateway. Seattle recognizes that Haneda is a limited entry market whose scarcely available slots must be allocated for the public benefit. In the 2010 Haneda proceeding Delta, after carefully evaluating all aspects of potential scenario, indicated that Seattle was its top priority gateway. Unfortunately, Seattle was not afforded the opportunity at the time and, yet, today it is the largest US-Tokyo O&D market. Delta should be permitted to reallocate the slots to Seattle, its top priority gateway, thereby providing the public with gateway parity in the US-Haneda marketplace.

Counsel: Port of Seattle, Isabel Safora, 206-787-3216


September 13, 2012

Consolidated Answer of United Air Lines

The Department should select United’s proposal to serve the second largest West Coast-Tokyo market at its hub at San Francisco International Airport to maximize the public benefits available from the allocation of two pairs of Tokyo Haneda slots. United’s proposed flights will provide additional capacity and greater convenience for the large business communities in both San Francisco and Tokyo, the large Japanese and Asian populations in the San Francisco region, the large American community in Tokyo and travelers through United’s San Francisco hub network. United’s proposed San Francisco-Tokyo Haneda service will also provide increased competition in the US-Japan market by adding a fourth US carrier at Haneda, by introducing new carrier competition for beyond points across the Western part of the US that already have connecting service via Los Angeles, and by making daily nonstop US carrier Tokyo Haneda service available in each of the two largest West-Coast Tokyo markets.

Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2500


 

September 13, 2012

Corrected Reply of the Port of Seattle

Seattle is the largest city for the US-Tokyo market that does not offer service to Haneda. In contrast, the states of California and Hawaii each enjoy three Haneda slot pairs. As Washington State Governor Christine Gregoire expressed in her letter to Secretary LaHood in support of Delta's motion, Seattle-Haneda service will result in new opportunities, rather than an expansion of existing service as requested by the other US markets competing in this proceeding. Seattle stands behind Delta's request and respectfully submits that granting Delta's motion is the only decision the Department can make that will provide maximum benefits for the traveling and shipping public.

Counsel: Port of Seattle, Isabel Safora, 206-787-3216


September 13, 2012

Reply of the United Master Executive Council of the Air Line Pilots Association, International

Granting United's application for San Francisco-Haneda service would maximize pubic benefits by providing US Carrier direct service to Haneda from the second largest US-Tokyo market on the West Coast. San Francisco does not presently have US carrier direct service to Haneda, despite its market position, its substantial Asian population, and importance as a key travel market for US companies in the Bay Area who generate a disproportionate amount of business travel to Tokyo's business districts, which are most conveniently accessed via Haneda. As noted in United's Application and Consolidated Answer, the San Francisco-Haneda service also would reach a greater number of Western US communities, as well as a greater number of passengers and connecting flights throughout United's domestic network than would be served by any of the competing proposals.

By: United MEC, Jay Heppner


 

September 18, 2012

Letters in Support of Hawaiian Airlines - 9MB

Enclosed please find additional support for the Application of Hawaiian Airlines, Inc. in the above-referenced docket. This support comprises a petition, circulated by Mr. Takeo Izawa in 2011 before the start of this proceeding, indicating popular support for a Kona-Japan route. There are a total of 1,490 signatures. Also included are 272 letters of support from current and former employees and friends of Hawaiian Airlines.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2725


 

September 25, 2012

Motion of Hawaiian Airlines for the DOT to Take Official Notice

Hawaiian Airlines, Inc. respectfully moves the Department to take official notice of the attached White House September 19, 2012 press release highlighting the importance of boosting foreign travel and tourism in the United States. The press release highlights the progress made since the issuance of Executive Order 13597, which established the Task Force on Travel Competitiveness and further confirms the importance that this administration puts on increasing foreign tourism to the United States.

The issues before the Department in this proceeding relate directly to goals established by the Presidentially-established foreign travel and tourism initiative. As a Task Force member, the Department of Transportation has a key role in promoting increased foreign tourism to the United States so that our economy can reap the resulting benefits of increased spending by foreign visitors. Of the four applications submitted in this proceeding, Hawaiian’s proposal will – by a substantial margin – best meet the administration’s objectives by increasing foreign tourism and spending in the United States.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


 

September 27, 2012

Letter in Support of United Air Lines
Congresswoman Anna Eshoo (CA-14), Congressman Mike Thompson (CA-1), Congresswoman Jackie Speier (CA-12), Congresswoman Lynn Woolsey (CA-6), Congressman George Miller (CA-7), Congresswoman Barbara Lee (CA-9), Congressman Pete Stark (CA-13), Congressman Sam Farr (CA-17), Congresswoman Doris Matsui (CA-5), Congressman Michael Honda (CA-15), Congresswoman Zoe Lofgren (CA-16) and Congressman Jerry McNerney (CA-9)


 

October 12, 2012

Letters in Support of Delta Air Lines
Congressional Delegations of Alaska, Idaho, Montana, Oregon and Utah

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


 

October 2, 2012

Senator Daniel Inouye (D-HI) in Support of Hawaiian Airlines

I am writing in support of the application filed by Hawaiian Airlines to institute nonstop service to and from Kona International Airport in Kona, Hawaii, and Haneda Airport, in Tokyo, Japan. This route would help support Hawaii's visitor industry and provide an economic boost to Kona and Hawaii Island.

By: Senator Daniel Inouye


October 3, 2012

Hawai'i Resolution in Support of Hawaiian Airlines

Be it resolved by the Council of the County of Hawai'i, that the US DOT is urged to approve the application of Hawaiian Airlines for allocation of a nonstop route between Haneda, Japan and Kona, Hawaii.

By: County of Hawai'i and State of Hawai'i




October 19, 2012

DOT Memorandum of Communication

On September 28, 2012, during a call with Representative Rick Larsen of Washington, the Congressman expressed his support for the application of Delta Air Lines to operate between Seattle and Tokyo's Baneda International Airport.

I informed the Congressman that, while I appreciated his interest in this case, I could not comment on its merits because the proceeding was under active consideration by the Department.

By: DOT


October 19, 2012

DOT Memorandum of Communication

On October 5, 2012, during a call with Congressman Adam Smith of Washington, the Congressman expressed his support for the application of Delta Air Lines to operate between Seattle and Tokyo's Haneda International Airport.

I informed the Congressman that, while I appreciated his interest in this case, l could not comment on its merits because the proceeding was under active consideration by the Department.

By: DOT


October 19, 2012

DOT Memorandum of Communication

On October 5, 2012, during a call with Senator Patty Murray of Washington, the Senator expressed her support for the application of Delta Air Lines to operate between Seattle and Tokyo's Haneda International Airport.

I informed the Senator that, while I appreciated her interest in this case, I could not comment on its merits because the proceeding was under active consideration by the Department.

By: DOT

 

November 7, 2012

DOT Memorandum - Notice of Communication

On October 5, 2012, during a call with Senator Orrin Hatch of Utah, the Senator expressed his support for the application of Delta Air Lines to operate between Seattle and Tokyo's Haneda International Airport.

I informed the Senator that, while I appreciated his interest in this case, I could not comment on its merits because the proceeding was under active consideration by the Department.

By: DOT


 

Order 2012-11-12
OST-2010-0018 - 2010 US-Tokyo (Haneda) Proceeding

Issued and Served November 15, 2012

Order to Show Cause

We have tentatively decided that it is in the public interest to grant the motion of Delta to move its Detroit-Haneda slot pair to provide daily scheduled services between Seattle, Washington and Tokyo’s Haneda International Airport, rather than select an alternative use for that slot pair.

Since we last examined the allocation of Haneda slots in the 2010 US-Haneda Combination Services Allocation Proceeding, we have had the benefit of two years of US carrier experience operating within the limited arrival/departure-time window at Haneda. We also now have the benefit of knowing which US gateways Japanese carriers have chosen to serve with their limited slot pair allocations – Honolulu and Los Angeles for ANA; and Honolulu and San Francisco for JAL.

Against this background, and having considered the entire record before us, we tentatively select Delta’s proposed Seattle-Haneda service. We tentatively find that Delta’s proposal would best serve the public interest by providing the first nonstop Haneda service on a significant mainland US-Tokyo route that currently lacks any such service, thereby establishing a new US gateway to Haneda. We tentatively find that Delta’s proposed service would further serve the public interest by providing a number of western cities with a first one-stop connecting opportunity to Haneda. We tentatively find in addition that other cities that now enjoy one-stop connections over more southerly gateways would gain the option of service over a less circuitous northwest gateway.

Allowing Delta to move from Detroit to Seattle would also advance one of the prime objectives we sought to achieve in our last Haneda proceeding, namely, seeking with our limited number of Haneda opportunities to address a diversity of public interest goals. We tentatively find that an outcome that brings first-time Haneda service and first US-flag Haneda service to the sixth-largest O&D market, while also promoting the geographic diversity of the US-Haneda gateways, would be consistent with our established approach for the award of limited Haneda slot opportunities and would best serve the public interest.

The competing carriers argue that Delta’s proposal should not be selected because the Seattle-Tokyo O&D market is the smallest proposed in this proceeding. We tentatively find, however, that only Delta’s proposal would open Haneda access to a new region of the country, the Pacific Northwest, resulting in a greater number of service options for the traveling public.

By: Susan Kurland


 

November 26, 2012

Comments of American Airlines

American Airlines, Inc. does not object to the Show Cause Order 2012-11-12, November 15, 2012, tentatively granting the motion of Delta Air Lines, Inc. to shift one slot pair, currently allocated for Detroit-Haneda services, to the Seattle-Haneda market, and denying the competing applications of American Airlines, Hawaiian Airlines and United Air Lines. While we are disappointed in the outcome, and continue to believe that our proposed Los Angeles-Haneda flights would best serve the public interest and enhance inter-alliance competition, we recognize that objections at this point are unlikely to succeed.

We do think it important to point out, as we did in our initial response to Delta’s motion, that the Department should simply grant all US Carriers operating to Haneda the flexibility to shift gateways as market conditions warrant, following the precedent established by Order 2004-6-25, June 28, 2004, regarding Brazil frequencies.

Counsel: American, Francis Heil, 202-496-5642


November 26, 2012

Objection of Continental and United Master Executive Councils of the Air Line Pilots Association, Int'l

The Continental and United Master Executive Councils of the Air Line Pilots Association, Int'l, representing the over 12,000 pilots in service of United Air Lines object to the Department of Transportation's Order to Show Cause allowing Delta to transfer its current Detroit-Tokyo Haneda slot pair to the Seattle-Tokyo Haneda market. The Joint MEC believes that, upon reexamination of certain factors on which the Department based its tentative selection of Delta at Seattle, it will find that a different decision is compelled by the greater public benefits offered by United at San Francisco.

Because the San Francisco-Tokyo market is significantly larger than the Seattle - Tokyo market and because United can provide one-stop connections to more communities (including some in the Northwestern region of the US) than Delta/Alaska at Seattle, it is clear to the Joint MEC that the Department needs to reverse its tentative decision and select United to provide first time US-carrier nonstop service to Haneda from its San Francisco hub gateway.

Counsel: ALPA, Jay Heppner


November 26, 2012

Comments of Delta Air Lines

Regarding the Department’s tentative proposal to require that service be implemented with 90 days of a final order, Delta confirms that it is prepared to meet any startup condition required by DOT. It would, however, assist Delta in the orderly and efficient introduction of new Haneda service if the Department were to require startup within 120 days of a final order. Delta normally begins marketing of a long-haul international flight at least six months in advance of the service. 90 days is well into the booking curve of such flights. Delta’s new Seattle-Haneda flight will be competing with the established Seattle-Tokyo services of United and ANA, which have been open and available for sale many months in advance. Passengers who would have been attracted to Delta’s new Haneda service have already booked travel on other flights. The Department has used a 120 day startup condition in numerous prior cases, and, for the reasons noted, it would also be appropriate to do so here.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


November 26, 2012

Objection of the San Franciso International Airport

The Department's Order to Show Cause reflects an undue weighting of the benefit of" promoting geographic diversity" and "establishing a new US gateway" for Haneda service, while insufficiently focusing on the core public interest goal of enabling service where the unserved need -- the real-world passenger demand -- is greatest. By tentatively awarding this important service to "the smallest market [proposed] in this proceeding," DOT necessarily denies it to a San Francisco Bay Area market that is three times the size of Seattle's and where United Airlines operates the largest and most comprehensive hub on the West Coast. As the Order points out, the other US cities applied for in this case already have greater Haneda route opportunities than SFO.

The Department correctly observes in its Show Cause order that United's proposal to serve SFO offers "notable attributes." SFO strongly supported United's proposal and respectfully submits that the facts regarding "real-world" market demand presented in SFO's Answer favor an award of the Haneda slots at issue to United for service at SFO - notwithstanding the seemingly decisional importance the Show Cause Order appears to ascribe to "geographic diversity." SFO accordingly objects to the Department's tentative decision and urges DOT to modify it accordingly to award the Haneda slots for use at SFO.

By: SFO, Kandace Bender, 650-821-5000


November 26, 2012

Objections of United Air Lines

United objects to the Department’s tentative decision to allow Delta to move its Detroit-Tokyo Haneda slot pair to the small Seattle gateway, rather than grant United’s application to initiate first-ever US-flag nonstop service to Haneda in the much larger San Francisco-Tokyo market and enhance competition for Tokyo Haneda service. United’s proposal to offer service from its San Francisco hub gateway should be selected under the Department’s well-established public interest standards. United also objects to the Department’s failure to award United back-up authority in the event the tentative decision granting Delta’s motion is not reversed.

The Department should, at the very least, award back-up authority to United in the event that it refuses to set aside its tentative selection of Delta’s Seattle-Tokyo Haneda proposal and Delta fails to institute as promised or terminates its Seattle-Haneda flights. The Department has already recognized that United’s proposed San-Francisco Haneda service is superior to either American’s at Los Angeles or Hawaiian’s at Kona. See Order 2012-11-12 at 6-7. Even if the Department elects to finalize its tentative selection of Delta’s Seattle-Haneda proposal, these valuable Haneda slots will have been squandered for more than two years. Without a back-up carrier in place, if Delta again seeks to abandon its Haneda service, there will be a significant delay in selecting a replacement. This will lead directly to a further loss of much needed Haneda service and the economic value of these scarce assets to the US economy, a loss that will be particularly harmful to the competitive position of the US carrier industry if reciprocal services by Japanese carriers continue.

Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2500


 

December 3, 2012

Answer of Delta Air Lines to Objections to Show Cause Order 2012-11-12

United makes the argument that an award to United would promote competitive balance among US carriers serving Japan. However, as previously explained by Delta, an award to United would have the opposite effect. Delta, the only non-aligned carrier serving Japan, would possess a single pair of Haneda slots while oneworld and Star would each have three Haneda slot pairs.

United’s request for back-up authority should be rejected. United’s request is inconsistent with the DOT’s processing of Haneda slot applications to date. In Order 2010-7-2, when the initial Haneda awards were made, DOT stated that if any applicant did not provide the service proposed that the Department would want to reconsider the matter “on the basis of a fresh record”. Likewise, in the current Show Cause Order, the Department stated that should Delta or any other carrier currently serving Haneda wish to change its gateway, the carrier should expect to compete for the allocation in another comparative selection proceeding. In other words, the DOT has consistently determined that back-up awards are not appropriate for Haneda slots and that the Department wishes to consider the merits of alternative slot uses based on current facts and circumstances.

United’s objections provide no basis to disturb the Department’s tentative findings. The Show Cause Order should be made final granting the motion of Delta to move one slot pair from Detroit to Seattle.

Counsel: Alexander Van der Bellen, 202-842-4184


December 3, 2012

Answer of the Delta Master Executive Council of the Air Line Pilots Association, Int'l to Objections to Order 2012-11-12

Not surprisingly, these three parties object to the DOT’s Show Cause Order to the extent the DOT granted Delta’s request to move its Haneda gateway from Detroit to Seattle. The DOT’s determination to approve Delta request is a sound decision and warrants being made final by the Department.

Counsel: Delta MEC, Timothy O'Malley


December 3, 2012

Answer of the Port of Seattle

The Port of Seattle greatly appreciates the Department's tentative decision to grant the motion of Delta Air Lines to institute a new service between Seattle and Haneda Airport in Tokyo.

Haneda slots are extremely valuable and highly limited. We enthusiastically welcome the Department's finding in its Order to Show Cause that "only Delta's proposal would open Haneda access to a new region of the country, the Pacific Northwest. "

By: Port of Seattle, Isabel Safora, 206-787-3216


December 3, 2012

Answer of United Air Lines

United continues to believe that its proposal to offer service from its San Francisco hub gateway should be selected under the Department’s well-established public interest standards, as supported by pleadings submitted by San Francisco International Airport and the United and Continental Master Executive Councils of the Airline Pilots Association, International and letters of support from Democratic Leader Nancy Pelosi, other members of Congress, and many other civic and business partners. If, however, the Department refuses to set aside its tentative decision, United urges the Department to grant United backup authority to ensure these Haneda slots are used for the maximum public benefit should Delta not begin its Seattle-Haneda service within the 90-day required startup period. United also asks the Department to deny American’s request to allow incumbent Haneda carriers to freely move their slots between gateways.

Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2500


 

Order 2013-2-4
OST-2010-0018

Issued and Served February 5, 2013

Final Order

We have decided to make final our tentative decision to grant the motion of Delta to move its Detroit-Haneda slot pair for scheduled combination services to Seattle-Haneda, rather than select an alternative use for that slot pair.

As we noted in our tentative decision, we have the benefit of two years of US carrier experience operating within the limited arrival/departure-time window at Haneda. We also have the benefit of knowing which US gateways Japanese carriers have chosen to serve with their limited slot pair allocations – Honolulu and Los Angeles for All Nippon Airways; and Honolulu and San Francisco for Japan Airlines.

Against that background, we tentatively concluded that Delta’s proposal would best serve the public interest by providing the first nonstop Haneda service on a significant mainland US-Tokyo route that currently lacks any such service, thereby establishing a new US gateway to Haneda. We tentatively found that Delta’s proposed service would provide a number of western cities with a first one-stop connecting opportunity to Haneda, and that other cities that now enjoy one-stop connections over more southerly gateways would gain the option of service over a less circuitous northwest gateway.

We also tentatively determined that an outcome that brings first-time Haneda service and first US-flag Haneda service to the sixth-largest O&D market, while also promoting the geographic diversity of the US-Haneda gateways, would be consistent with our established approach for the award of limited Haneda slot opportunities and would best serve the public interest.

Having reviewed the objections and answers filed by the parties to our tentative decision, we have determined that no party has brought to our attention any new argument that warrants a different conclusion.

We recognize, as we tentatively found in the show-cause Order, that United’s proposal would offer service in the sizable San Francisco-Haneda market, as well as provide extensive connecting opportunities. We have also considered the comparatively smaller size of the Seattle-Tokyo market. Given the limited number of nonstop Haneda opportunities available to the traveling public, however, and the fact that American already offers daily US-flag San Francisco-Haneda service through its code share with JAL, we continue to believe that the establishment of a wholly new US gateway for nonstop Haneda service, i.e., Seattle, outweighs the benefits of adding a second nonstop flight at San Francisco.

By: Susan Kurland


 

October 17, 2013

Application of United Air Lines

In light of American's decision to terminate its New York (JFK)-Tokyo Haneda service as of December 1, 2013, United applies for one daily pair of U.S.-Tokyo Haneda combination slots to provide scheduled foreign air transportation of persons, property and mail between San Francisco and Tokyo Haneda. Awarding Tokyo Haneda slots to United will allow it to provide convenient daily nonstop flights between United's hub at San Francisco International Airport and close-in Tokyo Haneda airport to the benefit of passengers traveling in the local San Francisco-Tokyo market as well as passengers traveling between points served behind United's San Francisco hub network and Tokyo Haneda - and promptly maximize the use of these scarce, valuable Tokyo Haneda slots. United's proposed San Francisco-Haneda flights will complement United's daily San Francisco-Tokyo Narita flight, which will continue to operate and offer alternative time of day departures and arrivals as well as service for passengers who prefer service at Tokyo Narita or are making connections there.

United currently holds blanket open skies authority permitting it to offer foreign air transportation between the U.S. and Japan. See Order 2007-4-19. Historically, United has operated up to two daily flights during certain time periods between San Francisco and Tokyo Narita. United would continue to operate at least one daily Tokyo Narita flight year-round if awarded the requested Tokyo Haneda slots.

Counsel: United and Crowell & Moring, Lorraine Halloway, 202-624-2500


 

October 23, 2013

Cessation of American Airlines' JFK-Haneda Flight

American Airlines Inc. hereby provides notice that it will cease operating its’ New York (JFK)-Haneda flight as of December 1, 2013, and as such returning to the Department the JFK-HND slot pair granted by Order 2010-7-2 in Docket OST-2010-0018 effective December 2, 2013.

Counsel: American, Francis Heil


 

October 24, 2013

Application of Hawaiian Airlines

In light of American Airlines, Inc.’s decision to terminate its New York (JFK)-Tokyo Haneda service as of December 1, 2013, thus freeing up an additional frequency for US carriers to operate to Tokyo’s Haneda airport, Hawaiian Airlines, Inc. respectfully submits this Application for the allocation of a slot pair for daily scheduled combination services at Tokyo International Airport. Hawaiian proposes to institute service to and from Kona International Airport, Kona, Hawaii. Kona is the second largest O & D market without direct service.

Since 2010, Hawaiian has initiated direct service from Honolulu to Tokyo Haneda, Osaka-Kansai, Sendai, Fukuoka, and Sapporo-Chitose. Hawaiian also offers codeshare service with ANA to Hiroshima, Kagoshima, Oita, Okinawa, Osaka-Itami and Sapporo-Chitose. Hawaiian’s initiation of service between Kona and Haneda will insure maximum utilization of the limited frequencies available at Haneda by providing service to not only the international market with the highest demand for service from and to Kona, but the second highest O&D market without non-stop service to Tokyo. It will provide the first service between Kona, Hawaii and Tokyo’s close-in airport, Haneda. Based upon the data available, Hawaiian’s present Haneda service has generated more traffic than any other authorized destination.

Hawaiian recognizes that United Airlines has filed a competing application for the slot pair at Haneda, and that under the Ashbacker doctrine, the Department is required to institute proceedings to allocate the requested authority.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


 

October 24, 2013

Answer of the San Francisco International Airport in Support of United Air Lines

San Francisco International Airport strongly supports the October 17, 2013 application of United Airlines, Inc. for one daily pair of US-Tokyo Haneda combination slots to initiate nonstop service from the Bay Area to Tokyo’s close-in airport, in light of American Airlines’ reported decision to terminate its New York-Haneda service in just six weeks. Awarding the slots to United will finally fulfill the Bay Area’s longstanding and uniquely strong need for US airline service to this key Tokyo airport.

By: SFO, John Martin, 650-821-5000




October 24, 2013

Answer of Hawaiian Airlines to United Air Lines' Application

Hawaiian notes that United’s application for service from San Francisco, California to Haneda fails to comply with the Rules of Practice, Part 302, and should be dismissed for that failure. In particular, United’s application fails to provide information required under 14 CFR 302.303(b)(3), including the type of equipment and its source, capacity, and schedule. United’s application also fails to address the required use of fuel and its availability as required by of 14 CFR 302.4(a)(1).

On October 24, 2013, Hawaiian filed an application requesting that the Department award it American’s returned slot pair thereby allowing Hawaiian to operate combination service between Tokyo International Airport, Tokyo, Japan and Kona, Hawaii. With the filing of Hawaiian’s application the Department has before it at least two mutually exclusive applications, unless of course the Department dismisses United’s application. Thus, under the Ashbacker Doctrine,1 the Department must institute an allocation proceeding, just as it did with the initial Haneda proceeding in Docket OST-2010-0018 and when Delta Air Lines sought permission to move its Detroit-Haneda slots to the Seattle-Haneda route. Any decision regarding the Haneda slot pair made without a full proceeding and its incumbent procedural safeguards unfairly prejudices all procedurally sufficient applications.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


 

October 25, 2013

Reply of United Air Lines

United replies to Hawaiian's answer to United's application to provide first ever US carrier service between San Francisco and Tokyo Haneda that will also finally give United the opportunity to operate at Tokyo Haneda to the benefit of its customers, co-workers and communities. United notes that its application was unopposed at the time it was filed. Now that Hawaiian has filed a competing application, however, United agrees that the Department is required to institute an allocation proceeding. United will plan to supplement its application in accordance with the requirements set forth in the Department's instituting order, as is standard procedure in such cases.

Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2500


 

Order 2013-11-9
OST-2010-0018

Issued and Served November 14, 2013

Order Instituting Proceeding

By this order, we institute a proceeding and invite interested U.S. carriers to file applications for one slot pair for scheduled combination services between the United States and Tokyo’s Haneda Airport.

In light of our goal of reaching a prompt final decision, we intend to process this case on an accelerated procedural schedule. Therefore, we are establishing the following procedural schedule for submissions:


Petitions for Reconsideration: November 19, 2013
Answers to Petitions: November 22, 2013
Applications/Supplements/Amendments: November 26, 2013
Answers: December 4, 2013
Replies: December 9, 2013

By: Susan Kurland


 

November 19, 2013

Joint Motion to Modify Procedural Schedule and to Shorten Answer Period

With the Thanksgiving holiday falling on Thursday, November 28, 2013, the Department's Procedural Schedule only gives interested parties three working days to prepare Answers to Applications and Supplements/ Amendments thereto. United and Hawaiian believe that this Procedural Schedule does not provide interested parties with enough time to prepare thorough Answers without significantly disrupting their Thanksgiving plans. The Department's decision making process will be greatly aided by providing interested parties with one additional week to prepare their Answers because the work and coordination required to present meaningful responses to Applications and Supplements/ Amendments thereto cannot reasonably be accomplished in the time frame currently allotted - if interested parties expect to be able to observe the Thanksgiving holiday with their families and loved ones. Therefore, United and Hawaiian request that the Department modify the Procedural Schedule by pushing back the deadlines for Answers and Replies by one week to December 9 and 16, 2013, respectively.

Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2500 for United / Dow Lohnes, Jonathan Hill, 202-776-2000 for Hawaiian Airlines





November 19, 2013

Petition of Delta Air Lines for Reconsideration of Order 2013-11-9

By Order 2013-11-9, the Department instituted a proceeding to consider applications for the Tokyo Haneda Airport slot pair returned by American as a result of the cancellation of its New York (JFK) - Haneda service. Delta respectfully petitions the Department to expand the scope of this proceeding to consider and allow amending the terms and conditions of previously-allocated Haneda slots to allow them to be used at any US gateway, consistent with Open Skies principles.

The US-Japan aviation marketplace is rapidly evolving, and it is important for carriers to have flexibility to respond to changes in the marketplace as they occur, without the need for successive route case proceedings.

Since the Department last conducted a Haneda route case in 2012, significant new changes have occurred that will impact existing Haneda operations. American has elected to cease Haneda service from JFK, and those slots will be re-allocated. Additionally, Japan and Canada have entered into new agreement providing for Haneda flights beginning in April 2014, making daytime service from Air Canada’s Vancouver hub a distinct possibility.

The impact of these marketplace developments on other west coast Haneda gateways is not yet known. It is vital that US flag Haneda competitors have the ability to make network changes quickly, as in other open skies markets, without the uncertainty and delay of a route case. Indeed, current gateway restrictions place US carriers at a disadvantage to their Japanese competitors, who are free to make changes to their Haneda services as market conditions warrant.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


 

Served November 19, 2013

Notice

In the interest of reaching an expedited decision, we have decided to shorten the answer period. Therefore, answers to the joint motion of United and Hawaiian shall be due on November 21, 2013.

By: Paul Gretch


 

November 22, 2013

Answer of Hawaiian Airlines to Petition for Reconsideration of Order 2013-11-9

Hawaiian Airlines, Inc. files its Answer in Opposition to the Petition for Reconsideration of Order 2013-11-9 filed by Delta Air Lines, Inc. pursuant to Order 2013-11-9. The Department of Transportation has, since the inception of this proceeding in 2010, undertaken a careful and thoughtful review of each route specific proposal before it to determine which will “most likely offer and maintain service that best meets the needs of the traveling and shipping public.” Order 2010-1-17 at 1, 2. Delta now proposes to change radically the basis on which DOT evaluates a limited entry market case. Instead of focusing on the merits of a particular route proposal for the traveling public, Delta proposes that the DOT focus on the merits of a particular carrier without reference to the gateway or route proposal. This fundamental change undermines the foundation of this entire proceeding. Moreover, it compromises the myriad of business decisions that carriers have made in reliance on the Department’s Orders authorizing service through specific gateways.

It is ironic to contrast Delta’s position on the relaxation of government restrictions on the mobility of Haneda slots to their position on the relaxation of the restrictions on operating hours at Haneda, which Delta opposed this fall. In the latter case, Delta supported maintaining restrictions on carriers’ freedom to operate. Here, they support operational flexibility, apparently seeking to move their Haneda gateways for a third time without having to go through a comparative proceeding. In considering Delta’s petition, the Department should weigh the merits in light of the opportunism the proposal represents.

The careful public interest analysis that DOT has undertaken in arriving at its two final orders in this docket have considered each applicant’s service proposal, its impact on the overall competitive environment, market structure and competition in the US-Japan market. As DOT stated in Order 2010-7-2 at 6, the Department attempted “to satisfy diverse public interest objectives and needs in selecting carrier proposals for award of available rights [and] the ability to allocate slots pairs to enable four daily US-Haneda services allows us to reintroduce convenient US-Tokyo access while addressing a variety of important public interest objectives.” To turn this proceeding into a carrier selection proceeding rather than a route proceeding, the DOT will have to altogether ignore the analytical framework it has established for awarding particular routes over others, given the unique benefits to the traveling public of each such route. Delta’s proposal also undermines the investments carriers have made in reliance on the Department’s present Orders that awarded carriers specific routes. With the certainty, carriers that were selected on the basis of their proposed gateway will abandon those gateways to layer additional service on top of the successful routes, disadvantaging the carriers that made the initial application for and investment in the route in reliance on the DOT Order awarding route specific authority.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000





Served November 22, 2013

Notice Amending Procedural Schedule

By this Notice, we grant the joint motion of United Airlines, Inc. and Hawaiian Airlines, Inc. filed November 19, 2013, seeking to modify the procedural schedule set forth in Order 2013-11-9, in light of the Thanksgiving holiday. United and Hawaiian jointly requested that the Department delay the due dates for Answers and Replies to December 9 and 16, 2013, respectively. The carriers also requested that answers to their joint motion be due on November 21, 2013. We shortened the answer period, as requested, and no answers were filed.

Taking into account the lack of opposition to the joint motion, we have decided to grant the carriers’ request. Accordingly, we have amended the procedural schedule in the US-Haneda Combination Services Allocation Proceeding as follows:

Applications/Supplements/Amendments: November 26, 2013
Answers: December 9, 2013
Replies: December 16, 2013

By: Paul Gretch


 

November 26, 2013

Request of Hawaiian Airlines for Incorporation of Previous Application

On October 24, 2013, Hawaiian filed an application for the available slot pair for the purpose of initiating first-of-its-kind service from Kona International Airport, Kona, Hawaii to Tokyo International Airport. As contemplated by the Order, Hawaiian incorporates the contents of that application by reference. Hawaiian’s Application contained all the information requested in the Order, so no supplementary information is being provided at this time.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2725

Application of Hawaiian for Kona-Haneda - October 24, 2013

Order 2013-11-9 - Instituting Order



November 26, 2013

Application and Supplement to Petition of Delta Air Lines

In Delta’s Petition for Reconsideration of Order 2013-11-9, Delta requested that the Department expand the scope of this proceeding to consider the issue of gateway flexibility. In the event that Delta’s Petition is granted, Delta hereby applies for an amendment to the terms and conditions of its previously-allocated Haneda slots to allow them to be used at any US gateway. Delta further proposes that the Department allow the same gateway flexibility for all US carriers holding Haneda slots. The US-Japan aviation marketplace is rapidly evolving, and carriers must have flexibility to respond to changes in the marketplace as they occur, without the delay of successive route case proceedings.

Hawaiian was the only carrier to object to Delta’s Petition. Delta supplements its Petition with the following response to Hawaiian’s Answer, and respectfully asks the Department to grant gateway flexibility to all US carrier Haneda slot holders in the course of this proceeding:

  1. Contrary to Hawaiian’s assertions, Delta does not propose to “change radically” the Department’s consideration of route case awards, or require that future awards be made “without reference to the gateway or route proposal.” Rather, Delta proposes that the Department apply exactly the same procedures and precedent which it has used in administering US-Brazil awards for more than a decade. By Order 2004-6-25, the Department found that it was in the public interest to eliminate city-pair restrictions from all prior route case awards and to allow carriers commercial discretion in the use of their frequencies. In the 12 years since that Order was issued, the Department has conducted multiple carrier selection cases to allocate new or unused US-Brazil frequencies. In each case, the carriers’ gateway and route proposals have figured prominently in DOT’s decision, notwithstanding the Department’s decision to remove gateway limitations from all prior awards. See, e.g. Orders 2013-6-16; 2009-3-14; 2005-2-10. The Department’s decision to eliminate gateway restrictions from all prior Brazil awards has not impacted DOT’s ability to conduct appropriate and effective route case proceedings when new or returned frequencies become available, and the Department will be able to do the same at Haneda.
  2. Japanese carriers maintain large hubs at Haneda, and there are no restrictions on Japanese carriers’ ability to change the US gateways from which they offer Haneda service. In the interest of fairness it is important that US network carriers serving Japan have commercial flexibility to make the most effective use of their Haneda slots based on current market conditions.
  3. Hawaiian’s call for tight regulation of Haneda slots and applying route case constraints in perpetuity to limit competition among US carriers is inconsistent with open skies and the Department’s procompetitive aviation policies. While comparative route case proceedings may make sense in determining initial allocations of slots and new authority (as in Brazil), US-Haneda carriers should be free to adapt their services to market demands over time, thereby promoting maximum service and competitive benefits.
  4. The Department is free to make changes to the terms and conditions of previously issued Haneda slots. Hawaiian concedes as much, but urges that the Department “do so in a separate proceeding.” The Administrative Procedure Act requires only that the Department provide appropriate notice of the issues to be considered in this case. There is no APA requirement that the Department establish a separate docket. The issues raised by Delta’s Petition are simple and straight-forward, as evidenced by the pleadings submitted thus far. Hawaiian has been on notice of the proposal since November 19, and the Department has extended the procedural schedule by an additional week, now running through December 16. Since the Department will be conducting a thorough review of the public interest issues associated with US-Haneda service, it will promote sound decision making and administrative efficiency to consider all of the relevant Haneda issues here, including Delta’s Petition.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184

 

November 26, 2013

Supplement of United Airlines

United’s proposal will provide convenient daily nonstop flights between United’s hub at
San Francisco International Airport and Tokyo Haneda to the benefit of customers traveling in
the large San Francisco-Tokyo market as well as customers traveling between points served
behind United’s San Francisco hub network and Tokyo Haneda. United at San Francisco will also offer shippers the convenience of Tokyo Haneda’s downtown location. United’s proposed
San Francisco-Tokyo Haneda flights will complement its daily San Francisco-Tokyo Narita
service, which will continue to operate (Exhibit UA-103) and offer alternative time of day
departures and arrivals as well as service for customers who prefer service at Tokyo Narita or are
making connections there

Counsel: United and Crowell & Moring, Lorraine Halloway, 202-624-2500


 

November 29, 2013

Surreply of Hawaiian Airlines to Delta's Petition for Reconsideration

Through a purported “application,” Delta proposes to alter the rights and conditions applicable not only to the single pair of Haneda slots at issue in this proceeding but all the previously awarded slot pairs. As a threshold matter, Delta’s “application” is not proper because Delta has not applied for the Haneda slot pair being returned by American Airlines, stating it has no plans to terminate recently approved service from Seattle. More significantly, the proposal was not incorporated into either Order 2013-11-9 or in the Notice Amending Procedural Schedule issued November 22, 2013. Grant of the Delta’s petition, which would constitute relief to a party not participating in the current proceeding, is defective under the Administrative Procedure Act.

It would simply be unfair and improper for the Department to initiate an adjudicatory proceeding based on a single set of assumptions and, in the middle of the proceeding, change the rules. Hawaiian, and presumably United, applied to initiate service from Kona and San Francisco respectively, based on the understanding that the single available Haneda slot pair would be awarded on the same basis as the prior awards. The purpose of this proceeding is for Hawaiian and United, not Delta, to explain the merits of their respective proposals so that the Department can make an award that is in the public interest. The carriers’ proposals, arguments and the administrative record necessarily reflect the carriers’ understanding of how those benefits will be realized in light of the existing regulatory framework, but Delta proposes to fundamentally alter the operating environment for US carriers. Changing the nature of the criteria to award the slots in the middle of the proceeding completely undermines the process. Neither the applicants nor the Department’s interest are served in generating a record based on one set of assumptions only to have the rules changed as the proceeding progresses. Hawaiian therefore respectfully requests that the Department move forward to award the authority contemplated in Order 2013-11-9 with all deliberate speed and to reject Delta’s Petition.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2700


 

December 9, 2013

Answer of Delta Air Lines

Delta takes no position on the applications of United and Hawaiian. We request only that Delta and other US carriers be allowed flexibility to make the most effective use of their existing Haneda slots by operating from any US gateway authorized for service under the open skies agreement with Japan.

As explained in Delta’s application, it is in the public interest to allow US carriers freedom to use their previously allocated Haneda slots as warranted by market conditions. This will maximize consumer benefits and help to level the competitive playing field between US carriers and their Japanese flag competitors who are free to deploy their Haneda slots at any US gateway.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184




December 9, 2013

Consolidated Answer of Hawaiian Airlines - Bookmarked

In contrast to other carriers, Hawaiian has fulfilled every promise that it has made to the Department and maximized the opportunity presented by the Department’s initial award. Indeed, Hawaiian has used the initial grant of Haneda slots as a platform to expand service throughout Japan, taking advantage of the Open Skies agreement to provide new, competitive service between the two countries. Hawaiian’s track record compels confidence that Hawaiian will make the most of the reallocated Haneda frequency.

In making its prior awards of Haneda slots, the Department has sought to promote “geographic diversity” by selecting “US-Haneda gateways” operated by different carriers across the country. The carriers awarded the slot pairs for mainland service, however, have largely squandered the opportunity granted by the Department. In particular, carriers operating gateways located in the eastern half of the country have failed. Within 15 months of starting service to Detroit, Delta applied to transfer the service to Seattle, and now American Airlines has returned the slot pair allocated for its Haneda-JFK service. Meanwhile, airlines operating west coast gateways have struggled, and airlines have experienced low load factors, repeatedly cancelled service and down-gauged their aircraft. Now, United proposes San Francisco service that is duplicative of existing service and duplicative of its own service from Narita International Airport to both SFO and the service of its Star Alliance partner All Nippon Airways to both SFO and nearby San Jose. United’s proposal urges the Department to insert more capacity into an already over-served market, where existing service is being withdrawn and down-gauged.

In this proceeding, the Department has the opportunity to reallocate a slot pair to a carrier that will maximize the public benefits by awarding a second frequency to Hawaiian. By selecting Hawaiian’s Kona application, the Department will facilitate the introduction of service to a new Haneda gateway and allow the introduction of service on the second largest O&D route without nonstop service from Tokyo. The resulting award will produce the most public benefits because it will stimulate Japanese-originating traffic and bring more Japanese visitors to the United States.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000

 

 

December 9, 2013

Answer of United Airlines - Bookmarked

United proposes to provide first ever U.S. carrier Tokyo Haneda service at its San Francisco hub gateway – serving one of the largest U.S.-Tokyo gateways without nonstop U.S. carrier access to Haneda. Meanwhile, Hawaiian proposes to serve a small gateway that would offer comparatively far less benefits to U.S. consumers and virtually no connecting opportunities for communities served behind Kona. United is the only applicant in this proceeding that has not been given the opportunity to serve Tokyo Haneda to the benefit of its customers, co-workers and communities and is thus the only applicant that can bring new competition to Tokyo Haneda. Selecting United over Tokyo Haneda incumbent Hawaiian will both maximize public benefits and create new U.S. carrier competition between the Western U.S. and Tokyo Haneda.

Despite Hawaiian's attempts to rely upon the success of its incumbent Honolulu-Tokyo Haneda service as a basis for selecting its proposal in this entirely separate proceeding, Hawaiian at Kona does not compare to United's San Francisco hub gateway. The Department need look no further than the strong and continued support that United's proposed San-Francisco-Tokyo Haneda service has received from Democratic Leader Nancy Pelosi, members of the California Congressional Delegation,
San Francisco International Airport and many other civic and business partners as evidence of the clear public benefits that will flow from United at San Francisco.

Counsel: United and Crowell & Moring, Lorraine Halloway, 202-624-2500




December 9, 2013

Answer of the United Master Executive Council of the Air Line Pilots Association, International in Support of United Air Lines

In the 2010 proceedings, the Department granted two slot pairs to Delta Air Lines, one to American Airlines and one to Hawaiian Airlines, ultimately denying a single slot to either Continental or United, placing the new United at a competitive disadvantage with other US carriers. Permitting United to serve Tokyo Haneda would finally remedy that competitive inequity by awarding non-stop service from San Francisco, the second largest US West Coast gateway to Tokyo, the heart of the second largest city in the world. It also serves as a vehicle to balance service from the US west coast already provided by US carriers from Los Angeles and Seattle.

Counsel: ALPA, Jay Heppner, 847-292-1700


 

December 16, 2013

Consolidated Reply of Hawaiian Airlines

In its Answer, United makes an appeal to the Department’s sense of fairness, arguing that it should receive the award because “United is the only applicant in this proceeding that has not been given the opportunity to serve Tokyo Haneda.” This is not a reason to award the single available slot pair to serve Tokyo International Airport (Haneda) to United.

In the order instituting this proceeding, the Department stated that its “principal objective [is] to maximize public benefits.” In response, United has made the same inferior proposal (San Francisco to HND) that the Department has rejected in two prior proceedings. Not surprisingly, scrutiny of the arguments in United’s application and answer demonstrates that the purported benefits of its proposed SFO-Haneda service are illusory and that only Hawaiian’s proposal to serve Haneda from Kona will maximize the public benefits. The reasons for this stem from the fact that the size of the Hawaii-Tokyo market overwhelms the size of the market between Tokyo and California and the Bay Area in particular.

The introduction of service between Haneda and Kona will attract many more passengers than United’s proposal to add yet another daily nonstop between Tokyo and SFO, a market that is both overwhelmed with capacity and already dominated by United and its Star Alliance partner ANA. United’s answer makes a number of illogical or misleading claims, including that its proposed SFO service will introduce competition, that Kona-Tokyo is “much smaller” than SFO-Tokyo and that its proposed connecting services will generate public benefits. None of these arguments hold water,

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000

 

December 16, 2013

Reply of The San Francisco International Airport

Beyond simply establishing the first U.S. carrier connectivity, United's proposed service advances other tangible air traveler interests that support its commercial success at SFO, where the airline operates a vast network of flights. Bay Area businesses and thousands of long-haul individual travelers who have corporate travel arrangements or benefit from United or Star Alliance frequent flier ''loyalty" programs will be able to access those benefits when traveling to downtown Tokyo. Meanwhile, Tokyo-bound fliers from throughout the country can take advantage of SFO's smooth domestic-to-international connections facilitated by its "secure connector" that avoids duplicative security screening. (Hawaiian's Answer at p. 46 distorts the extent of this "behind"-SFO trafiic to Tokyo by counting only passengers bound specifically for Haneda airport, where United has no service.) Travelers will also benefit from United's planned eventual use of the passenger-friendly Boeing 787.

By: SFO, Kandace Bender, 650-821-5000

 

December 16, 2013

Reply of United Airlines

With airlines facing a heated competitive environment and an ever-increasing need to maximize operational efficiency, the focus has shifted to finding the aircraft that best balances demand and efficiency to help ensure long term viability of services. The fact that United has been forthright regarding its fleet plans for San Francisco-Tokyo Haneda service should be applauded rather than chastised, as Hawaiian attempts cynically to do.

United’s plans to utilize the most efficient aircraft for its proposed first ever U.S. carrier San Francisco-Tokyo Haneda service, the extensive Asia/Pacific services United already provides at its San Francisco hub, and the new entrant competition it will provide with Delta on the West Coast, all outweigh significantly the flight Hawaiian proposes to offer at Kona.

Counsel: United and Crowell & Moring, Lorraine Halloway, 202-624-2500


 

December 17, 2013

Letters in Support of Hawaiian Airlines - 14MB

Enclosed are 48 letters of support for the application of Hawaiian Airlines to serve Haneda International Airport from Kona. These letters express the strong support of political leaders, including Governor of Hawaii, Neil Abercrombie; State Representatives Nicole Lowen, Faye Hanohano, Mark Nakashima, Denny Coffman, Clift Tsuji, Cindy Evans, and Richard Onishi; and Mayor of Hawaii County, William Kenoi, as well as some of the many businesses and individuals that will benefit from the new tourist dollars that Hawaiian’s proposed service will bring to Kona.

Counsel: Dow Lohnes, Benjamin Berlin


 

December 18, 2013

Surreply of Hawaiian Airlines to United Air Lines' Reply

In its Reply, United incorrectly alleged that the Kona-Tokyo market has decreased by 34% since the last case. United erroneously compared the Kona MIDT sample numbers from the last case, which had been expanded to reflect the full market size, with the raw current MIDT numbers that have not been similarly expanded in this case. Had United compared the correct Kona numbers from the last case with the correct numbers from the present case, it would have found that the Kona market is, as Hawaiian has shown, larger now than it was in the last case.

Additionally, United’s comparison of the change in Kona’s share of total Hawaii traffic is wrong for the same reason. United incorrectly showed that Kona’s share of Hawaii has dropped from 6.8% in the last case to 4.0% in the current. The correct numbers are 4.4% for the last case and 4.0% for the current case. Since the Kona market is growing, the explanation for the change is simply that Honolulu is growing faster. Honolulu, of course, has enjoyed the benefits of nonstop service and added capacity, while Kona has had none of these advantages.

United has attempted to persuade the Department by comparing apples to oranges in the hope that the Department would not catch United’s sleight of hand. There is no question that Hawaiian’s proposed Kona service maximizes public benefit and should be selected for the available Haneda slot pair.

Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000


 

December 20, 2013

Letters in Support of Hawaiian Airlines
Governor of Hawaii, Senator Brian Schatz (D-HI), Senator Mazie Hirono (D-HI), Congresswoman Colleen Manabusa (HI-1), Congresswoman Tulsi Gabbard (HI-2)

Counsel: Dow Lohnes, Benjamin Berlin


 

Order 2014-1-3
OST-2010-0018

Issued and Served January 7, 2014

Order on Reconsideration

We have decided to grant Delta’s petition for reconsideration, and on reconsideration, to deny the relief requested.

Granting Delta’s request would involve a fundamental change to the character of the current proceeding, requiring new public interest criteria and substantial additional procedures. We see no persuasive basis for pursuing such an approach in this proceeding, especially when the petitioning party itself cites no immediate need for the change it requests.

Delta cites our Brazil decision as precedent for its request. However, that decision expressly states that “we would not necessarily be prepared to follow this same approach in other markets,” and that our action regarding Brazil was “limited to the specific circumstances and context before us.” We do not find that Delta has adequately demonstrated that the current circumstances and context as to US carrier Haneda services call for the same actions as we were prepared to adopt in Brazil.

Against that background, we do not find that the public interest would be served by granting Delta’s request

By: Susan Kurland


 

January 8, 2014

Kauai Chamber in Commerce in Support of Hawaiian Airlines

The Kauai Chamber of Commerce supports Hawaiian Airlines' application for Tokyo-Kona non-stop service.

As a Chamber, we support these efforts that will continue to contribute to economic, social and cultural ties between Hawaii, Japan and the United States. Our islands have had an enduring relationship that dates back to the arrival of lssei (first-generation) Japanese since the Meiji Era opening in 1868 during the Hawaiian Kingdom.

By: Randall Francisco


 

Order 2014-2-23
OST-2010-0018

Issued and Served February 28, 2014

Order to Show Cause

We have tentatively decided to allocate the one available slot pair to United for daily scheduled combination services between San Francisco and Tokyo’s Haneda Airport.

United’s proposal would introduce a new entrant at Haneda, a factor that the Department has historically given considerable weight in carrier selection proceedings, and we tentatively find that the opportunity to introduce a new entrant at Haneda would make the best use of the one available slot pair.

We tentatively find that selection of United’s San Francisco proposal would enhance competition in the San Francisco-Haneda market. San Francisco-Haneda service is currently provided by JAL, with American holding out service on the JAL flights on a code-share basis. United’s proposed service would provide intra-gateway competition, and introduce the first US carrier-operated service in the San Francisco-Haneda market. We tentatively find that competition in the local San Francisco market would benefit from having a US-flag carrier provide nonstop service to Haneda with its own aircraft.

We also tentatively find that selection of United’s San Francisco proposal would enhance inter-gateway competition in the West Coast-Tokyo market by giving consumers an additional choice for connecting service to Haneda over United’s well-established San Francisco hub. Delta currently provides Haneda service from its Los Angeles and Seattle gateways, with connections to a variety of western communities, and United’s proposal will provide an additional travel option for Haneda service at a number of those western cities that are currently served by Delta. Furthermore, United’s proposal would expand access to Haneda by providing connecting service to several other smaller western cities that do not currently enjoy one-stop Haneda service.

We have fully considered the relative merits of Hawaiian’s competing proposal to introduce Kona-Haneda service; however, we tentatively find that the benefits to the traveling public of United’s proposal outweigh the potential benefits associated with Hawaiian’s proposal.

We find that our tentative selection would best benefit the US traveling public, including both business and leisure travelers, a factor that we believe deserves considerable merit. Hawaiian itself acknowledges that its proposal would attract primarily Japan-originating travelers.

While Kona-Haneda service might benefit the local and State economies, San Francisco would attract a more diverse mix of business and leisure traffic originating in both the United States and Japan, precisely the type of traffic that would benefit most from access to Tokyo’s downtown Haneda airport.
We have taken note of Hawaiian’s arguments that the San Francisco-Tokyo market is saturated with excess capacity. When we take into account the large local traffic base at San Francisco, combined with United’s proven ability to attract US-Asia connecting traffic over its strong hub, along with the specific attributes represented by Haneda, however, we tentatively do not find a reason to question United’s ability to sustain its proposed Haneda service.

We also tentatively find that the potential benefits of new competition in the San Francisco-Haneda market, and the broader West Coast-Haneda market, outweigh the potential benefits that might be achieved by introducing new service to the substantially smaller Kona-Haneda market. United’s proposal will widen Haneda access to a sizeable competitive catchment area, while new service at Kona, with only inter-Hawaiian-island connections, would have much less competitive impact. We tentatively find that the public interest would be better served by enhancing competition and broadening Haneda access.

Against this background, we tentatively conclude that selecting United’s San Francisco-Haneda service proposal would provide the best use of the one available slot pair.

By: Susan Kurland


 

March 10, 2014

Comments of United Air Lines

United applauds the Department's well-considered decision tentatively allocating one US-Haneda daily slot pair to United to provide first-ever US carrier service between the nation's premier trans-Pacific gateway, San Francisco, and Tokyo Haneda, to the benefit of United's customers, coworkers and communities. The Department recognized the overall superior merits of United's service proposal, finding "that the potential benefits of new competition in the San Francisco-Haneda market, and the broader West Coast-Haneda market, outweigh the potential benefits that might be achieved by introducing [Hawaiian's proposed] service to the substantially smaller Kona-Haneda market" (Order 2014-2-23). United's proposed San Francisco-Tokyo Haneda service will also provide new or competitive connecting opportunities throughout the Western US. Against this backdrop, United asks that the Department issue a final order confirming its tentative selection so that United may begin to make the necessary arrangements for its Tokyo Haneda service well in advance of start-up.

United urges the Department to finalize its tentative selection of United's proposal for first-ever nonstop US carrier service between United's San Francisco hub gateway and Tokyo Haneda and thereby maximize the public benefits available to the traveling and shipping public through this proceeding.

Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2500 for United




March 10, 2014

Objection of Hawaiian Airlines

Specifically, Hawaiian objects to the Department’s conclusion that its “tentative selection would best benefit the US traveling public,” concluding that United would serve a “mix of business and leisure traffic originating in both the United States and Japan.” By focusing on the origin of United’s traffic, the Department moved the goal posts since the Order instituting this proceeding in which it declared: “Our principal objective in this proceeding will be to maximize public benefits” without reference to the origin of the traffic to be served. Because Hawaiian’s proposed Kona service would attract significant numbers of Japan-originating passengers, it would stimulate the most traffic and spur the most economic growth. Indeed, in its Answer, Hawaiian submitted evidence that its proposed Kona service would result in $75.4 million in incremental spending in the United States compared to only $16.5 million in incremental spending resulting from United’s proposed service. Hawaiian therefore respectfully submits that grant of its application would maximize the public benefits by providing a viable service in a market that is not over served and providing the most economic benefit to the United States, as reflected in the record.

In addition, in its final order, Hawaiian requests that the Department affirm the public interest benefits of foreign originating traffic and the tourism it facilitates. In 2012, President Obama expressly recognized the importance of promoting travel and tourism in the United States by issuing an Executive Order establishing a new Task Force on Travel and Competitiveness. The Task Force subsequently issued a report acknowledging the importance of transportation policy on the promotion of tourism.4 The Department previously has recognized the importance of the promotion of tourism in this very docket. In tentatively awarding Hawaiian its initial Haneda slot pair in 2010, the Department found that the economic benefits of increasing Japan-originating visitors justified the award of Haneda authority to Hawaiian:

We have taken into account Hawaiian’s acknowledgment that the large majority of the Honolulu-Tokyo market consists of Japan-originating leisure traffic. However, we tentatively find that, in addition to the service and competitive benefits outlined above, Hawaiian’s service would benefit the local Hawaiian economy. Tourism is the dominant industry in the local economy, and Japan-originating visitors comprise a significant percentage of travelers to Hawaii. The Department has previously found benefit to the Hawaiian economy to be an affirmative public interest factor worthy of decisional weight in our regulatory proceedings.

The nearly four years of experience since that initial award have proven the Department correct. Hawaiian’s existing Haneda-Honolulu service has been a smashing success with significant public and economic benefits.

The Show Cause Order appears to contradict the Department’s prior conclusion by disproportionately crediting US originating traffic: “a more diverse mix of business and leisure traffic originating in both the United States and Japan” is “precisely the type of traffic that would benefit most from access to Tokyo’s downtown Haneda airport.” Indeed, United’s arguments and the Show Cause Order, at least by implication, suggest that US originating passengers provide greater benefits to the United States than foreign originating passengers. This is simply not true. Unlike foreign originating passengers, US originating passengers spend dollars overseas for the benefit of the destination country. Foreign originating passengers spend in the United States for the benefit of the US economy, and the government treats these expenditures as US exports. Precisely because the bulk of Hawaiian’s traffic on the proposed Haneda-Kona route would be Japanese originating, the service would increase US exports, generate economic growth and create jobs in the United States.

Counsel: Cooley LLP, Jonathan Hill, 202-842-7800





Order 2014-4-6
OST-2010-0018

Issued and Served April 4, 2014

Final Order

By this Order, we make final our tentative findings and conclusions set forth in Order 2014-2-23, and allocate one US-Haneda slot pair to United Airlines, Inc. for daily scheduled combination services between San Francisco, California and Tokyo’s Haneda Airport.

Our tentative decision, contrary to Hawaiian’s assertion, focused on much more than the origin of United’s traffic. We highlighted that the Department has historically given considerable weight to new entrant applicants in carrier selection proceedings, and that introducing United as a new entrant at Haneda would make the best use of the one available slot pair. We also tentatively found that selection of United’s San Francisco-Haneda proposal would provide intra-gateway competition at San Francisco by introducing the first US carrier-operated service in the Haneda market, while enhancing inter-gateway competition in the West Coast-Tokyo market by giving consumers an additional choice for connecting service to Haneda over United’s well-established San Francisco hub. We tentatively found that the benefits to the traveling public of United’s proposal outweigh the potential benefits associated with Hawaiian’s proposal.

We have considered Hawaiian’s various objections to our tentative decision, as well as the merits of its Kona proposal, and do not find that a different outcome is warranted. Hawaiian argues that its proposed Kona-Haneda service would generate greater economic benefits than would additional Tokyo service from San Francisco. Notwithstanding the positive attributes of new Kona-Haneda service, we find that those factors are outweighed by the aggregate of benefits to be derived from United’s San Francisco-Haneda proposal. We acknowledge that Hawaiian’s proposal would likely prove beneficial to the local and State economies; however, on balance, we find that the competitive benefits of new United service to Haneda from its San Francisco hub would make better use of the one available slot pair, and is likely to attract the diverse mix of business and leisure traffic, originating in the US and in Japan, that will benefit from access to Tokyo’s downtown Haneda airport.

Having carefully considered the record in this proceeding, we have decided to make final our tentative selection of United for daily combination services between San Francisco and Tokyo’s Haneda Airport.

By: Susan Kurland


 

April 11, 2014

Motion of United Airlines for a 35-Day Start-Up Extension

Recognizing the important public benefits that United’s San Francisco-Tokyo Haneda service will provide, the Department awarded United the one daily slot pair that was available in this proceeding by Order 2014-4-6. That award is subject to a start-up condition that United commence service “within 180 days of March 30, 2014,” or by September 26, 2014. As the IATA Winter Season begins just a few short weeks thereafter on October 26, 2014 and United will only be able to secure the slot times at Tokyo Haneda best suited to its San Francisco service as of that date, United requests a 35-day extension of the Department’s start-up condition. The modest extension United seeks will allow it to more efficiently plan, market and implement the new service approximately one month after the date required currently, and will have no impact on the long-term benefits that United's San Francisco-Tokyo Haneda service will provide.

This request is consistent with similar relief that the Department has granted to other carriers selected to serve Tokyo Haneda. See Department Actions dated December 29, 2010 (28-day extension for American) and September 27, 2010 (30-day extension for Delta) in this docket; see also Order 2013-2-4 (30-day extension of Delta's start-up condition not contrary to the public interest).

United urges the Department to grant it a 35-day extension, until October 31, 2014, for United to commence its San Francisco-Tokyo Haneda service.

Counsel: Crowell & Moring, Gerald Murphy, 202-624-2500


 

April 17, 2014

Comments of Hawaiian Airlines

Hawaiian notes that when it received its authority to fly to Haneda in 2010, not only was it the only carrier that did not ask for a delay in the start date, but it started service to Haneda, pursuant to Order 2010-7-2, before the 90-day period for startup established by DOT had expired.

Should United be unable to commence service as required by DOT, Hawaiian stands ready to initiate service from Honolulu to Haneda.

Counsel: Cooley LLP, Jonathan Hill, 202-842-7800


 

October 2, 2014

Motion and Application of American Airlines

American Airlines, Inc. respectfully requests the Department to grant this motion to withdraw one daily US-Haneda frequency from Delta Air Lines (Although the Haneda route rights are sometimes referred to as slots, they do not give carriers a right to a specific time of operation, as an airport slot would. In substance, they are a right to operate a daily service, usually referred to as frequencies, and we adopt that terminology here), and to reallocate that frequency to American. Delta just announced that it is reducing its Haneda service for the upcoming winter season. American would use that frequency between Los Angeles and Haneda year-round, service that would be substantially superior to Delta’s near-dormant Seattle-Haneda service. American vigorously opposes any use of these valuable Haneda rights on a seasonal basis, and we stand ready to use them fully on a year-round basis. The Department should not allow Delta to squander these valuable frequencies, which the United States worked hard to obtain, and for which there is unmet demand.

As the Department is aware, the frequency is subject to the condition that it will become dormant and revert automatically to the Department if it is not used for a period of 90 days. The table above shows that Delta plans to operate a daily service for one week every 90 days – just enough to keep the frequency from going dormant and reverting to the Department for reallocation. Out of 182 possible operating days, Delta plans to operate on only 17 days – less than 10 percent of the total days. This limited service provides no consumer benefits.

Counsel: Thompson Hine, Charles Hunnicutt, 202-263-4189


 

Served October 6, 2014

Notice Extending Answer Date

On October 2, 2014, American Airlines, Inc. filed a motion requesting that the Department withdraw one daily US-Haneda slot pair from Delta Air Lines, Inc.; and an application to reallocate that slot pair to American.

Under the Department’s regulations, answers to motions are due within seven business days after the filing, while answers to applications are due within 15 days after filing. With respect to American’s October 2, 2014 motion and application, answers would normally be due October 14 and October 17, respectively.

To simplify the administrative filing process, we have decided to extend the due date for answers to the motion portion of American’s filing to coincide with the due date for answers to the application portion. Accordingly, answers to American’s October 2, 2014, submission in this Docket shall be due on October 17, 2014. Replies to answers may address both the motion and the application and will be due on October 28, 2014.

By: Paul Gretch


 

October 9, 2014

Motion of Hawaiian Airlines to Reopen Order 2013-2-4 and Answer to the Motion and Application of American Airlines

Delta Air Line’s approach to route cases can be summed up with the old proverb “if at first you don’t succeed, try, try again.” Having repeatedly made promises to the Department of Transportation that it has failed to deliver, Delta continues to undermine the Department’s goal of expanding US air carrier access to Tokyo’s Haneda Airport. By converting, without DOT approval, its recently-awarded frequency between Haneda and Seattle to a seasonal route and flying just the minimum number of flights to avoid triggering the 90-day dormancy condition, Delta has demonstrated that it is not committed to Haneda service but to warehousing frequencies and protecting its hub at Narita International Airport from the diversion of passengers through Haneda.

To avoid the warehousing of this valuable Haneda frequency, Hawaiian Airlines, Inc. files this pleading to: (1) request that the Department reopen the grant of authority in Order 2013-2-4, which approved Delta’s request to move its Detroit-Haneda frequency to Seattle, and modify the dormancy condition to require meaningful year-round service; (2) support the motion of American Airlines, Inc. to withdraw Delta’s Haneda slot pair awarded in the Order; (3) oppose the Application of American Airlines to start its own service from Los Angeles to Haneda; (4) request that the Department notice a new proceeding to develop the factual record before reallocating Delta’s Seattle-Haneda frequency; and (5) inform the Department that, in the event the Department elects to initiate a reallocation proceeding, Hawaiian will submit an application to provide year-round service in full utilization of the allocated frequency.

Counsel: Cooley LLP, Jonathan Hill, 202-776-2000


 

October 17, 2014

Consolidated Answer of Delta Air Lines

The Department should question why American is now attempting to obtain more Haneda access by denying it to Seattle. Just a few months ago, American voluntarily relinquished its own HND slots at New York JFK and did not even attempt to reapply to use those slots at LAX. Even after choosing to give up its JFK slots – and perhaps as part of its rationale for doing so – American retains access to Haneda. In 2010, American convinced the Department to grant antitrust immunity to create a revenue-sharing joint venture with Japan Airlines on the premise that American and JAL would operate as one airline across the Pacific. Thus, ATI effectively provided American access to JAL’s two Haneda slots, which the joint venture uses to fly from San Francisco and Honolulu. American is now claiming that despite sharing revenue and scheduling control of two Haneda slots, and having given up another slot pair, the Department should remove service from Washington and shift it to California where there is already existing Delta and ANA service to Haneda from LAX, and to supplement recently awarded United service to Haneda from SFO in addition to JAL. This feeble claim is inconsistent with DOT’s public interest mandate.

The Department should also note American’s temerity in arguing here that DOT should strip Delta of its SEA-HND slot for having reduced its winter schedule, while American has regularly made its own seasonal adjustments rendering limited international frequencies unused for 90 days or more over a period spanning more than a decade. No action was taken by the Department to recall American’s unused frequencies. The Department should squarely reject American’s cynical call for a different and unprecedented result here.

Regarding Hawaiian’s aspirations, the Department has three times rejected its bid to add a fourth daily Hawaii-Haneda flight on top of the existing three flights operated by Hawaiian itself, JAL, and ANA (together with their respective immunized alliance partners). Just this year the Department declined Hawaiian’s Kona-Haneda proposal in favor of west coast hub service to “enhance inter-gateway competition in the West Coast-Tokyo market by giving consumers an additional choice for connecting service to Haneda” and found “that the benefits to the traveling public of [competitive west coast hub service] outweigh the potential benefits associated with Hawaiian’s proposal.” Order 2014-2-23 at 4. Seattle, in contrast, is the only Haneda gateway in the Pacific Northwest, providing the geographic and commercial diversity the Department has prioritized in distributing Haneda slots.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184




October 17, 2014

Consolidated Answer of the Delta Master Executive Council of the Air Line Pilots Association, International

The Delta Master Executive Council, the Delta chapter of the Air Line Pilots Association, International hereby answers in opposition to the Motion and Application of American Airlines, Inc. asking the DOT to strip from Delta two slots used for Seattle-Haneda service even though Delta has been and will continue to provide service on the route in full compliance with the DOT’s explicit dormancy conditions. The Delta MEC urges that American’s Motion be rejected and its application be dismissed.

We note that Hawaiian Airlines filed an Answer supporting American’s Motion, but opposing American’s Application. Obviously Hawaiian is hoping to poach the slots from Seattle to add yet more service at Hawaii, which already enjoys three Haneda flights. Hawaiian’s Answer is equally without merit and adds nothing of significance to American’s brazen and improper attempt to deprive Seattle and the Pacific Northwest of their only nonstop Haneda service.

Counsel: Delta MEC, Michael Donatelli




October 17, 2014

Consolidated Answer of the Port of Seattle to American Airlines and Hawaiian Airlines

Delta's Seattle-Haneda service provides vital competition to the ATI alliances with Japanese carriers and increases the geographic options for travelers in the Pacific Northwest region. It has only been 16 months since the inauguration of Delta's Seattle-Haneda service. The familiarity of Seattle travelers with this route is not yet optimal, but Seattle is working closely with Delta sales and marketing to improve and further develop this valuable route for the region.

Neither American nor Hawaiian disputes that Delta is operating its Seattle-Haneda slots in full compliance with the Department's dormancy conditions. As such, it would be unlawful and unwise to summarily withdraw slots from Seattle and put them up for reallocation to another gateway.

We urge the Department to deny the motions of American and Hawaiian in this proceeding.

Counsel: Port of Seattle, Isabel Safora, 206-787-3216


 

October 21, 2014

Consolidated Answer and Reply of American Airlines to Motion and Answer of Hawaiian Airlines

American Airlines, Inc. and Hawaiian Airlines, Inc. agree that the Department should withdraw Delta’s Seattle-Haneda frequency and reallocate it to another carrier. Hawaiian offers the Department an alternate path for withdrawing the frequency from that proposed by American; however, the result is the same – a better use of the frequency. Of course, the carriers disagree as to who should receive the allocation. American will further address this issue and other points in its response to Delta’s consolidated answer of October 17, 2014.

American urges the Department to move forward and give the frequency to American, basing its action on the greater public benefits that American can provide in today’s conditions.

Although the Haneda route rights are sometimes referred to as slots, they do not give carriers a right to a specific time of operation, as an airport slot would. In substance, they are a right to operate a daily service, usually referred to as frequencies, and we adopt that terminology here.

Counsel: Thompson Hine, Charles Hunnicutt, 202-263-4189


 

October 28, 2014

Consolidated Reply of American Airlines

The Department should grant the application of American Airlines, Inc. for the Haneda frequency held by Delta Air Lines, Inc. without further delay. American is anxious to get into the market and provide a competitive alternative to existing US-Haneda services. No legal impediment prevents immediate reallocation of the frequency. The Department has the power and the right to withdraw the frequency from Delta, given its effective abandonment of the market. Delta has had the required due process of notice and an opportunity to present its views, and no other application for the Haneda frequency is pending. The Department should allow American to offer US consumers the Haneda service the United States worked hard to obtain.

Delta and its supporters assert that Delta can keep its Seattle-Haneda frequency if it “complies with” the dormancy condition. Their assertion is based on a misreading of the letter and spirit of the dormancy condition. The dormancy condition is not a guarantee that a carrier can keep a frequency indefinitely simply by providing a few flights every 90 days. The frequency may not revert automatically, but the analysis does not stop there. Read literally, the dormancy condition’s only function is to terminate an unused frequency automatically, allowing the Department to reallocate the frequency to another carrier without further procedure.

Counsel: Thompson Hine, Charles Hunnicutt, 202-263-4189 / American, Howard Kass, 202-326-5153


 

October 30, 2014

Motion of Hawaiian Airlines to File an Otherwise Unauthorized Pleading and Surreply to American Airlines

Hawaiian disagrees with American’s assertion that the Department can grant American’s application without instituting a proceeding to reallocate the Seattle-Haneda slot. Good cause exists to allow this Sur-Reply because it will clarify Hawaiian’s position concerning the Department’s authority and Hawaiian’s intention to submit a competing, mutually exclusive application in any subsequent proceeding.

American’s argument that the Department has no obligation under the Ashbacker doctrine to hold a full reallocation proceeding to develop a full factual record is form over substance. American overlooks the terms of Order 2013-2-4 granting Delta the authority to fly Haneda-Seattle. In its Motion and Answer, Hawaiian did not submit an application but made clear its intention to participate in any subsequent reallocation proceeding. In doing so, Hawaiian recognized that the Department would need to start a proceeding to modify the terms of Order 2013-2-4 and the fact that in each instance that the Department has considered the award of a Haneda frequency, it has set a procedural order requesting applications and setting a briefing schedule. Hawaiian has every intention of following through on its promise to participate in any subsequent proceeding, as it has on all of its Haneda commitments. If the Department believes that an application is required at this time, Hawaiian will submit one without delay.

Counsel: Cooley LLP, Jonathan Hill, 202-842-7800


 

October 30, 2014

Comments of Los Angeles World Airports

Los Angeles World Airports wishes to convey its strong support for the Motion and Application of American Airlines in the matter of the 2010 US-Haneda Combination Services Allocation Proceeding dated October 2, 2014.

As operator of Los Angeles International Airport, LAWA firmly believes that the public interest will be better served by granting the motion of American Airlines, as they are committed to fully utilizing the reallocated frequency to conduct daily flights between the US and Haneda. The Los Angeles market has a strong track record supporting air service to Japan, and specifically to Haneda. US residents and visitors alike would benefit from an additional daily flight promoting competition and convenience. Los Angeles provides excellent connecting domestic service to virtually all US destinations on multiple air carriers, so that all consumers will benefit should your Department grant of the AA motion.

LAWA enthusiastically requests your Department finding in favor of American's motion.

By: Gina Marie Lindsey


 

December 8, 2014

Comments of The Governor of Washington

In 2013, the Department rightly believed that the best use of this slot was Seattle because it would provide the first nonstop Haneda service on a significant mainland US-Tokyo route that currently lacked service and would provide a number of western cities with their first one-stop connecting opportunity to Haneda. Other cities or states that the Department may be considering already have multiple direct flights to Haneda.

I ask that the Department allow Washington to keep its only direct service to Haneda. Thank you for your consideration of my request.

By: Jay Inslee


 

Order 2014-12-9
OST-2010-0018

Issued and Served December 15, 2014

Order Instituting Proceeding and Inviting Applications

By this order, the Department institutes a proceeding to determine the disposition of the US-Haneda slot pair currently allocated to Delta Air Lines, Inc. for services between Seattle, Washington, and Tokyo’s Haneda Airport. The Department is instituting this proceeding to determine, based on a fresh evidentiary record, whether the public interest would be best served by allowing Delta to retain the currently-allocated Seattle-Haneda slot pair or, instead, by an alternative disposition of the Seattle-Haneda slot pair.

In light of Delta’s extensive winter-season Seattle-Haneda service cutbacks, the submissions of American and Hawaiian and the responses thereto, the Department believes that the public interest requires a fresh examination of whether the best use of the Seattle-Haneda opportunity is to allow Delta to retain the slot pair for Seattle-Haneda service, or whether the public interest would be better served by reallocating the slot pair for service from another US city by another US carrier or by Delta.

To make the necessary public interest determinations, a complete evidentiary record will need to be established. The Department has therefore decided to institute a proceeding to develop such a record. Interested parties will be free to argue in favor of maintaining the allocation to Delta for Seattle-Haneda service, or in favor of allocating the slot pair to a different US carrier, or to Delta for a different US city. The principal objective in this proceeding will be to maximize public benefits with this scarce resource.

The Department does not need to decide whether Delta’s current level of Seattle-Haneda service triggers the dormancy condition. Where frequency allocations are not being operated effectively, the Department has the authority to reallocate them to ensure that they are used effectively and in a manner that promotes competition and otherwise best serves the public interest. The Department finds that the public interest warrants a proceeding to determine whether it remains in the public interest to allow this limited Haneda opportunity to remain with Delta for service at Seattle, or whether the public interest favors an alternative use of the authority.

The Department has decided to use written, non-oral show-cause procedures under Rule 210 of the Department’s regulations (14 CFR 302.210) in deciding this case. The Department finds no material issues of fact that would warrant an oral evidentiary hearing in this case. The Department is also simplifying its procedures and evidentiary requirement.

Petitions for Reconsideration: December 22, 2014
Answers to Petitions: January 2, 2015
Applications/Supplements/Amendments: January 5, 2015
Answers: January 12, 2015
Replies: January 20, 2015

By: Susan Kurland


 

December 22, 2014

Statement of Allied Pilots Association in Support of Application of American Airlines

As the Department well knows, the four daily slot pairs available to U.S. carriers for services between the U.S. and Haneda are a scarce, valuable resource. Delta’s current limited, seasonal service between Seattle and Haenda substantially underutilizes that resource.

In contrast, American has proposed a realistic plan for daily, year-round service between LAX and Haneda that is calibrated to improve the competitive structure of the U.S.-Tokyo market generally and respond to those characteristics that distinguish the U.S.-Haneda and U.S.-Narita markets. Specifically, American proposes to provide daily nonstop LAX-Haneda service utilizing the 247-seat widebody Boeing 777 aircraft. This service will maximize options for consumers traveling to, and doing business with, Japan. In addition, because current manning on the B-777 aircraft is approximately 23 pilots per aircraft, and the proposed service will require two such aircraft, American's proposal has the potential to create approximately 40-45 widebody pilot positions.

Counsel: James & Hoffman, Edgar James, 202-496-0500

 

December 22, 2014

Petition for Reconsideration of Delta Air Lines

The Department’s reexamination of the Seattle-Haneda frequencies unlawfully conflicts with the terms of the Department’s orders. As noted above, the Allocation Order granted Delta the Seattle-Haneda frequencies “indefinitely,” but it imposed two conditions on Delta’s continued use of the frequencies. As relevant, the dormancy condition states that “the slot pair will become dormant and will revert automatically to the Department if it is not used for a period of 90 days.” Order 2013-2-4. Delta is in compliance with that condition, as well as the other express terms and conditions of the Allocation Order. It thus is entitled to “indefinite[]” use of the Seattle-Haneda frequencies—language that is inconsistent with the view that the Department may revoke the frequency at will based on conditions not set forth in the Allocation Order itself. See Oxford English Dictionary 842 (2d ed.) (indefinitely: “Without definition or limitation to a particular thing, case, time, etc.”).

That the Allocation Order cannot be read to reserve by implication authority to revoke the “indefinite[]” allocation is bolstered by the fact that the Department knows how to reserve discretion to amend, modify, or revoke frequency allocations when it so intends. E.g., Order 2000-10-6 (adopting, in addition to a dormancy condition, an express condition that “we may amend, modify, or revoke the allocation at any time and without hearing, at our discretion”); accord Order 1999-8-9 (similar); Order 1999-4-21 (similar); see also Order 1997-11-35, at 5 & n.9 (stating “we award frequency allocations on the express basis that we may amend, modify, or revoke them in our discretion and without a hearing” and citing orders containing such express language). The Allocation Order here contains no such “amend, modify or revoke” provision.

The cited orders thus provide no support for the Order here and in, fact, they are consistent with the view that the Department must follow the express terms, conditions, and procedures it establishes in the order allocating a frequency. Put simply, if the Department wants to retain discretion to amend, modify, or revoke a frequency allocation, it can impose that condition or a similar condition in allocating the frequency, as it knows how to do.

Counsel: Wilmer Cutler, Seth Waxman, 202-663-6000 and Delta, Alexander Van der Bellen, 202-842-4184


 

January 2, 2015

Answer of American Airlines to Petition for Reconsideration

Currently, Delta is using this scarce resource to operate 17 flights between October 2014 and March 2015, whereas it could have operated 182 flights during that time. With this degree of underuse, the Department has not just the right, but also the obligation, to review its decision to allocate one slot pair to Delta for use at Seattle.

In its petition for reconsideration of Order 2014-12-9, Delta resists this review. Delta knows that the Department’s examination will show that it has squandered the valuable US-Haneda slot pair, and that it has failed to provide the service on which the award of that slot pair was predicated.

Delta has another pressing incentive to resist this review: each day of delay allows Delta to continue to preclude competitive entry into the US-Haneda market, where Delta holds two of the four valuable slot pairs. The Department should reject Delta’s petition and focus on the pleadings called for under the Carrier Selection Process of Order 2014-12-9. American will provide compelling evidence that its year-round daily Los Angeles-Haneda service will offer greater public benefits than Delta’s occasional Seattle-Haneda service.

Counsel: Thompson Hine, Charles Hunnicutt, 202-263-4189




January 2, 2015

Answer of Hawaiian Airlines to Petition of Delta Air Lines for Reconsideration of Order 2014-12-19

The Delta Petition asserts the myopic view that “the [Initiating] Order subjects the Seattle-Haneda frequencies to reexamination on the basis of single-season” ‘Seattle-Haneda service cutbacks.’” Delta’s cry of “wolf” is only part of the story. DOT’s Initiating Order succinctly provides objective and sound reasons for conducting this proceeding, including “Delta’s extensive winter-season Seattle-Haneda service cutbacks” as well as “the submissions of American and Hawaiian.” Hawaiian’s submission catalogued Delta’s repeated failures to live up to the commitments it made in the record in two prior cases. In light of this record, DOT had no choice but to reopen the proceeding to both protect the public interest and to ensure the highest and best use of the extremely scarce operating rights to and from Haneda.

Over the last four years, Delta has failed to fulfill numerous promises to serve Tokyo International Airport from both Detroit and later Seattle. In fact, the chasm between all Delta’s prior service proposals and its operational performance call Delta’s credibility in this proceeding into question. Given Delta’s abysmal Haneda service record, it is perfectly appropriate, and within DOT’s authority and responsibility, to hold this proceeding to consider whether Delta is simply not willing to provide the air transportation authorized by DOT Order 2013-2-4 and whether another carrier might offer a service that provides greater public interest benefits.

Counsel: Cooley LLP, Parker Erkmann, 202-842-7800


 

January 5, 2015

Application of American Airlines for Los Angeles-Haneda Service

American hereby submits this application for one slot pair to be used in the Los Angeles-Haneda market pursuant to 49 USC § 40109, 14 CFR Part 302, subpart C of the Department’s regulations, and Order 2014-12-9. Our service proposal provides:

  • Year-round daily service in the largest US-Tokyo market, Los Angeles-Haneda.
  • Convenient connections in both directions to 25 markets at Los Angeles, American’s West Coast gateway, in the Summer season and to 32 connections in both directions in the Winter season – more than any other Los Angeles-Haneda carrier.
  • Boeing 777-200 equipment with 247 seats: 16 First Class, 37 Business Class, and 194 Economy; planned 2015 configurations will increase seats to 260.
  • Significant addition of cargo capacity to this important Asian market.

Commencement within 60 days of issuance of a Final Order by the Department. To achieve the benefits described in this Application, the Department should reallocate to American the US-Haneda slot pair currently used by Delta for Seattle-Haneda service to allow American to offer its proposed Los Angeles-Haneda service.

Historically, American has repeatedly tried to secure a more comprehensive network to Japan. Yet, American’s efforts have been either practically or legally impeded by the incumbent carriers’ opposition and strong market position, which is the product of their many decades headstart in Asia on American, which in turn, is the product of their privileged “incumbent” position. More recently, American’s efforts to provide competition to the incumbents has faced another challenge: Delta’s attempts at the government negotiation table to block further US-Japan liberalization. As the Department is quite aware, no US carrier has been more vocal, active in, and supportive of US Government attempts to further liberalize the US-Japan aviation market than American.

Counsel: Thompson Hine, Charles Hunnicutt, 202-263-4189



January 5, 2015

Supplemental Comments of Los Angeles World Airports in Support of American Airlines

Los Angeles World Airports supports the application of American Airlines to operate seven weekly nonstop frequencies starting January 15, 2015 from Los Angeles International Airport to Tokyo-­Haneda. LAWA is a City of Los Angeles Department that owns and operates a system of three airports including LAX, LA/Ontario International Airport and Van Nuys Airport. LAX has the largest US passenger market demand to/from Tokyo-­Haneda in the contiguous US and the first nonstop flight serving oneworld passengers from LAX will offer enhanced service to a significant number of travelers and further shipping opportunities.

By: LAWA, Gina Marie Lindsey

 

January 5, 2015

Application of Hawaiian Airlines for Service Between Kona and Haneda

Hawaiian proposes to institute service to the second largest Origin & Destination market between the United States and Tokyo without nonstop service, Kona International Airport, Kona, Hawaii.

In conducting the “fresh examination” of whether the public interest favors reallocation of Delta’s Haneda-Seattle frequency, Hawaiian respectfully submits that the Department must view the US-Haneda market as it is, not as others may want it to be. DOT should award the contested frequency to the most compelling proposal given current competitive conditions at Haneda and in the Japanese market generally, as well as within the constraints imposed by the bilateral with Japan. The Department now has more than four years of operating history since service from US carriers was reintroduced into Haneda. During that time, the fundamental conditions applicable to US carrier operations at the airport have remained the same. The number of slot pairs available remains fixed at four; the hours of operation remain tightly restricted; and the alliance relationships between the major US and Japanese carriers have been stable. Given this stability, market data should drive the Department’s decision. That data demonstrates, without question, that Hawaii is the strongest market for Haneda service. In contrast, services between Haneda and the continental United States, without exception, have struggled. Indeed, the weakness of the mainland Haneda gateways, as evidenced by three service failures, is the reason the Department instituted this proceeding. The Department should reallocate the frequency based on current market conditions and not on the competing carriers’ aspirations or in reliance on the principle that a broad geographic distribution necessarily serves the public interest.

Delta’s Detroit and Seattle services have failed, as evidenced by Delta’s withdrawal from Detroit and its startling unilateral reduction in service in the Seattle market. American’s return of its New York frequency to the Department is proof positive of its failure. In addition, Delta’s Los Angeles service has only survived by reducing its aircraft size from a 403-seat B747 to its smallest aircraft capable of flying to Haneda, the 208-seat B767. United’s San Francisco service has survived only by reducing its service to Narita as it implemented its Haneda service.

Even before the competing proposals have been submitted, Hawaiian is confident that its proposal to serve Kona will generate the most public benefits. Quite simply, because the large Tokyo-Kona market is currently without nonstop service, Hawaiian’s service will be a commercial success, which will provide significant public interest benefits. First, in contrast to Delta’s Haneda operating history, the Department can rely on Hawaiian to utilize fully this valuable air service right.

Counsel: Cooley LLP, Parker Erkmann, 202-842-7800

 

January 5, 2015

Response of Delta Air Lines to Evidence Request

Delta Air Lines Inc. hereby responds to the information request set forth in Order 2014-12-9. The Department previously concluded that Seattle-Haneda service is in the public interest, and that the first and only service from the Pacific Northwest promotes geographic diversity and generates substantial public benefits that are superior to duplicative flights at well-served existing Haneda gateways. Delta is currently operating Seattle-Haneda service in full compliance with the terms and conditions specified in Order 2013-2-4), including the dormancy condition. Although Delta is operating at a temporary reduced level, Delta has firm plans, has allocated aircraft, is actively marketing, and will operate daily service at the start of the IATA Summer Season, effective March 29, 2015 and beyond. Given all of this and for the reasons set forth here, the public interest would best be served by permitting Delta to maintain Haneda-Seattle service.

By responding to the evidence request, Delta does not concede the lawfulness of the Department’s decision to reexamine the allocation of the Seattle-Haneda frequencies or of any final decision to reallocate the same slots to another carrier. Delta expressly incorporates by reference its Petition for Reconsideration of December 22, 2014, and, for the reasons set forth in that document, urges that further proceedings be stayed pending reconsideration of Order 2014-12-9. Order 2014-12-9 is arbitrary and capricious and contrary to law, and any final decision by the Department to reallocate the slots would be unlawful for the same reasons.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


 

January 12, 2015

Consolidated Answer of American Airlines

Throughout this proceeding, which began in 2010, the Department has placed a high priority on using the four slot pairs to improve the competitive structure in the US-Haneda market, and also in the U.S.-Japan and US-Asia markets. In 2010, the Department also placed great weight on achieving a geographic distribution of services, although time and experience have shown that geographic distribution may not be easily achieved beyond US west coast gateways in light of the curfews in existence at Haneda.

Adding American to the US-Haneda market is the best way to achieve the goals of enhancing competition and making sure that the rest of the country has access to Haneda. American is the largest carrier at Los Angeles. Its network will enable it to compete very effectively with Delta at Los Angeles as well as with United at San Francisco. It would also improve head-to-head competition with the Star and SkyTeam alliances both by increasing the intra- and inter-gateway competition among the alliances in the US-Haneda market, and by increasing the overall level of competition in US-Japan and US-Asia markets. Moreover, by offering greater capacity than Delta can, it would enable the Department to address the unmet demand for US-Haneda access that exists in both passenger and cargo services.

American is the only US airline serving Tokyo that is not currently authorized to serve Haneda. Allocating this Haneda slot pair to American will inject robust, vigorous competition, itself a consumer benefit, but also open an entirely new array of travel options for consumers and shippers—an undeniable substantial public benefit. As the Department noted in 2010, awarding American US-Haneda service will “enhance alliance competition by improving the competitive posture of American and oneworld in the US-Asia market as compared to the SkyTeam and Star alliances."

Counsel: Thompson Hine, Charles Hunnicutt, 202-263-4189




January 12, 2015

Consolidated Answer of Delta Air Lines

American’s exhibits filed with its original Application showed that American assigned the same flight number to its proposed LAX-HND flight as its existing LAX-NRT flight. Although American has now attempted to cover this up by assigning new numbers, American avoids mentioning and makes no commitment to maintain LAX-NRT servicflighte despite being called out on it in the initial round of pleadings. Furthermore, American’s gimmick of proposing an unrealistic 60 day startup in a long haul widebody market is further indication that American intends to swap the Tokyo markets operated with its existing equipment. Thus, it would appear that American intends to drop its own LAX-NRT service just as it canceled its own JFK-NRT service when it launched JFK-HND and left its partner JAL to fly JFK-NRT. American is playing a zero sum game. Allowing American to switch its LAX service from one airport to another (particularly when LAX has two existing Haneda flights) provides no public interest benefits compared with the substantial benefits generated by maintaining Seattle as a unique gateway serving the Pacific Northwest. By contrast, Delta will continue to serve NRT from Seattle, and Delta’s Haneda flight represents true incremental capacity in the marketplace to the benefit of consumers.

Delta’s proposal to maintain the only Haneda service to Seattle and the Pacific Northwest region deserves priority over Hawaiian’s proposal to add a fourth Haneda-Hawaii flight at Kona. Hawaii already receives three nonstop Haneda services operated by Hawaiian Airlines, JAL and ANA. Combined, these services represent 37.5% of all available Haneda slots. If Hawaiian’s Kona proposal were granted, 50% of Haneda slots (four of eight) would be operated to the Hawaiian Islands. The overwhelming majority of passengers on existing Tokyo-Hawaii flights (95%) are Japanese tourists, and the Tokyo-Kona market is even more heavily Japanese-originating (96%). It is not in the public interest to have so many limited entry opportunities concentrated in Hawaii to the exclusion of a Pacific Northwest gateway that provides service to US citizens and US businesses seeking access to Tokyo’s preferred close-in airport.

Delta is demonstrably and deeply committed to growing its Seattle hub and to daily flying of the Seattle-Haneda route beginning this March and continuing through the winter and summer seasons beyond. It is manifestly in the public interest to allow Delta to do so, rather than to revoke Seattle’s only Haneda connection in favor of the over-served Los Angeles or Hawaii gateways.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184




January 12, 2015

Consolidated Answer of the Delta Master Executive Council of the Air Line Pilots Association, International

The Delta Master Executive Council, the Delta chapter of the Air Line Pilots Association, International hereby answers in strong support of Delta’s response to the DOT’s information request set forth in Order 2014-12-9 to maintain Seattle-Haneda service. As stated in Delta’s application, Delta has committed aircraft resources, Seattle based flight crews and ground support employees to insure the success of the Seattle-Haneda route. Stripping Delta of the two slots used for Seattle-Haneda -- the only gateway in the Pacific Northwest -- and awarding them to another carrier for service in the well-served regions of California or Hawaii would be contrary to the public interest. Moreover, it would undermine the ability of Delta and its employees to offer a viable competitive alternative to American/JAL and United/ANA which operate massive hubs at Haneda, where Japanese carriers control 95% of the Haneda slots.

Counsel: Delta MEC, Michael Donatelli




January 12, 2015

Consolidated Answer of Hawaiian Airlines

Only Hawaiian’s proposed service to Kona will introduce nonstop service from Tokyo to a market that does not currently have it. Unlike the other carriers in this proceeding, Hawaiian has no investment in operations and facilities at Narita. Narita is dominated by the alliance carriers, which have huge commitments to that airport. The JAL-American joint venture operates 36 segments from Narita, including 14 weekly frequencies to LAX. Delta operates 17 segments from Narita, including 135 weekly departures. As a result, Hawaiian has a unique incentive to invest in and develop its Haneda service and can entirely focus its efforts in Tokyo there without worrying about cannibalizing a Narita hub. Both the American-JAL joint venture and Delta have significant investments in their operations at Narita. In fact, the fear of diversion from existing Narita services has likely been a major contributor to the periodic suspensions of all the mainline routes from the alliance carriers. With the substantial investment of oneworld at Narita, American will be similarly conflicted.

Because Hawaiian only operates at Haneda, it has a powerful incentive to promote, sell and operate its service at the airport. As a result, its service is additive to the capacity of the Tokyo-US market, which has led to an expanding Tokyo-Honolulu market and a superior operating record at Haneda.

Counsel: Cooley LLP, Parker Erkmann, 202-842-7800




January 12, 2015

Consolidated Answer of the Port of Seattle

Delta's Seattle-Haneda service provides vital competition to the ATI alliances with Japanese carriers and increases the geographic options for travelers in the Pacific Northwest region. Delta's Seattle-Haneda service is less than 2 years old. The familiarity of Seattle travelers with this route is not yet optimal. Seattle is working closely and in unique ways with Delta sales and marketing to improve and further develop this valuable route for the region.

Neither American nor Hawaiian disputes that Delta is operating its Seattle-Haneda slots in full compliance with the Department's dormancy conditions. As such, it would be unlawful and unwise to summarily withdraw slots from Seattle and reallocate them to another gateway.

As the airport owner and a regional economic catalyst, the Port of Seattle respectfully requests the Department to preserve and maximize the benefits to the public by maintaining Delta's Haneda frequencies in Seattle.

Counsel: Port of Seattle, Isabel Safora, 206-787-3216


 

Order 2015-1-14
OST-2010-0018

Issued and Served January 15, 2015

Order on Reconsideration

The Department has decided to grant Delta’s petition for reconsideration, and on reconsideration, to deny the relief requested. In reaching this result, we are following a longstanding Department precedent. Specifically, in Order 1997-11-35 we instituted the 1997 US-Argentina All-Cargo Frequency Proceeding to consider, among other things, whether we should reallocate frequencies then held by Challenge Air Cargo. Challenge argued that it had “used [its] frequencies within the 90-day dormancy period, which is the only established requirement, and that the Department cannot now impose additional standards to establish whether the frequencies are dormant.” Order 1997-11-35 at 5. The Department rejected Challenge’s position and maintained the proceeding, saying it need not make a determination regarding the dormancy condition because “we are instituting this proceeding under our general powers to review the public interest bases of the current awards.” Challenge petitioned for reconsideration, seeking rescission of the instituting order or modification of the proceeding. On reconsideration, the Department granted Challenge’s petition and denied the requested relief. Order 1997-12-19. We see nothing in Delta’s petition that would cause us to follow a different course here.

As indicated in Order 2014-12-9, the Department has determined that, in light of Delta’s extensive winter-season cutbacks, and the submissions filed on the record in this case, the public interest requires a fresh examination of whether the best use of the Seattle-Haneda opportunity is to allow Delta to retain its underlying authority to operate the slot pair for Seattle-Haneda service, or whether the public interest would be better served by reallocating the slot pair for service from another US city by another US carrier or by Delta. Delta has presented no information that would lead the Department to alter that conclusion.

The Department has instituted this proceeding under its general powers to review the public interest bases of current awards. The Department believes that procedures established in Order 2014-12-9, will provide Delta, as well as any other interested carriers, ample opportunity to argue its position and present any evidence it may wish to present.

By: Susan Kurland


 

January 16, 2015

Support Letters for American Airlines

Social Media Analysis for American Airlines

Enclosed please find an example of the nearly 2,300 letters from American Airlines employees to Secretary Foxx expressing support for American’s Los Angeles-Haneda service proposal.

Also enclosed is an overview of the extensive social media campaign supporting American’s proposed Los Angeles-Haneda route.

Finally, enclosed are more than 80 letters of support from various business entities for American’s service proposal.

Counsel: American, Howard Kass


 

January 20, 2015

Consolidated Reply of American Airlines to Applications and Answers of Delta Air Lines and Hawaiian Airlines

This proceeding is one that no one wanted to happen. Not the Department, which prefers carrier selection cases for distributing new commercial opportunities to US carriers to withdrawing them for under-utilization. Not Delta, which faces the prospect of having the Department withdraw one of its two Haneda slot pair allocations. Not American, which prefers the traditional method of entry into Haneda – via market liberalization – but has been thwarted by a lack of liberalization at the negotiating table, due, in large part, to Delta’s intransigence. American presumes that Hawaiian also prefers a scenario where carriers and competition, not the government, determine the appropriate service levels in the market.

Since the December 15, 2014 Instituting Order, each party has had ample opportunity to be heard through four sets of written testimony and/or narratives, as well as two sets of exhibits, and to critique the other applicants’ proposals. American has proved that its Los Angeles-Haneda service proposal is substantially superior to those of Delta and Hawaiian. Therefore, a Department allocation to American to operate Los Angeles-Haneda service represents the highest and best use of the slot pair and is in the public interest.

American has faced criticism of its JFK-Haneda service by the other applicants. The facts are clear: after losing tens of millions of dollars on the route and realizing that East Coast US flights to Haneda could not be commercially viable given the Haneda curfew restrictions on US flights, American returned its Haneda slot pair so the Department could reallocate the frequencies to another carrier and put the slot pair to a higher and better use. Returning the slot pair was the right thing to do at the time given the conditions facing the company and the fact that this slot pair represents an extremely scarce national resource. American should not be criticized by the other applicants or penalized by the Department in this proceeding for doing the right thing and acting in the public interest.

As the Department stated in its Instituting Order, the purpose of this proceeding is to “maximize the benefits of a scarce resource” – one of four Haneda slot pairs. American has proven that the Haneda slot pair’s current usage by Delta for Seattle-Haneda service has not and does come close to that objective and that, of the three applicants’ proposals in this case, American’s proposed Los Angeles-Haneda service offers substantially superior benefits than Delta’s and Hawaiian’s proposals and fulfills the Department’s objective of maximizing the public benefits of this Haneda slot pair.

Counsel: Thompson Hine, Charles Hunnicutt, 202-263-4189




January 20, 2015

Consolidated Answer of Delta Air Lines

The legal and public interest issues in the case are simple and straight forward. At bottom, the Department will need to decide four things:

  • First, should Seattle and the Pacific Northwest maintain the only service in the entire region, enabling international commerce, business investment and convenience for the traveling public?
  • Second, should the Department provide Los Angeles a third daily Haneda service by stripping Seattle of its only flight, when LAX is already strained under current operating conditions and one of the multiple LAX-HND flights might then fail?
  • Third, should US flag Haneda opportunities be used to benefit US consumers and US export business – or should they be used to benefit Japanese tourists? Given that plentiful capacity exists at Narita airport for less time sensitive leisure passengers, the answer seems obvious.
  • Fourth, will the Department observe its own rules and procedures, allowing a duly designated and operating carrier the flexibility expressly provided for in the Department’s ordering conditions, or will the Department arbitrarily and capriciously strip authority from Seattle inviting legal challenge, disruption, and further uncertainty in the US-Haneda marketplace?

Delta respectfully submits that the answers to these questions are self-evident. There is no legitimate legal, policy, or public interest basis for removing Haneda service from Seattle. The service has shown marked improvement fueled in large part by Delta’s commitment to growing the Seattle hub. While Alaska is an important codeshare partner, we have seen US-Asia traffic improve by a factor of two-fold in various markets where Delta has added own metal service.

Moreover, we note that Delta is currently operating Seattle-Haneda service in full compliance with the terms and conditions specified in Order 2013-2-4, including the dormancy condition. Seasonal variations are common in many international markets and while Delta is operating at a temporarily-reduced level, Delta has firm plans, has allocated aircraft, is actively marketing, and will operate daily service at the start of the IATA Summer Season, effective March 29, 2015 and beyond.

Delta reiterates that it does not concede the lawfulness of the Department’s decision to reexamine the allocation of the Seattle-Haneda frequencies or of any final decision to reallocate the same slots to another carrier. Delta expressly incorporates by reference its Petition for Reconsideration of December 22, 2014, and, for the reasons set forth in that document, urges that further proceedings be stayed pending reconsideration of Order 2014-12-9. Order 2014-12-9 is arbitrary and capricious and contrary to law, and any final decision by the Department to reallocate the slots would be unlawful for the same reasons.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184




January 20, 2015

Consolidated Reply of Hawaiian Airlines

Support Letters for Hawaiian Airlines

This proceeding presents the Department of Transportation with a policy choice. On the one hand, Hawaiian Airlines, Inc. has proposed a viable commercial service between Tokyo’s Haneda International Airport and Kona International Airport that has undisputed public interest benefits:

  • Hawaiian’s Kona proposal will stimulate traffic growth in the Tokyo-Kona market, increasing the number of tourists visiting the United States and leading to more economic growth and jobs in the United States than any of the other proposals, see HA-2015A-613-17, 620;
  • Hawaiian will use the largest aircraft proposed in this proceeding and therefore fly the most capacity, see HA-2015A-113;
  • Hawaiian has proposed to open a new Haneda gateway as opposed to gateways that have failed or are awash in service; and
  • Hawaiian’s service will expand its competitive footprint against the major alliances.

American Airlines and Delta Air Lines, on the other hand, make arguments laced with economic jingoism that their proposed services would benefit more US passengers than Hawaiian’s service. Besides being wrong about who benefits from foreign originating service, those services are not workable, redundant with existing Tokyo services and will provide minimal, if any, benefits to the United States. Delta’s Seattle service has proven to be a failure, and American proposes to inject more capacity into a market, Los Angeles, that cannot absorb it. Indeed, by proposing to use the same flight numbers as its current LAX-Narita service for HND-LAX, American has foreshadowed that grant of its application will come at the expense of current service, undermining any potential incremental benefit of its proposal.

Nevertheless, both Delta and American assert that the benefits of their connecting opportunities will save their respective proposals, but the benefits of their proposed connecting services for gateways to Haneda already have proven to be illusory See HA-2015R-109-11 (depicting minimal market impact of connecting services). Given the grave doubt concerning any public interest benefits from either of the alliance carriers’ proposals, the Department should select Hawaiian’s proposal to serve Kona so the Department can be assured that public interest benefits will result

Counsel: Cooley LLP, Parker Erkmann, 202-842-7800




January 20, 2015

Consolidated Reply of the Delta Master Executive Council of the Air Line Pilots Association, International in Support of Delta Air Lines

Nothing contained in the competing Answers of American and Hawaiian alters the fact that Seattle-Haneda service – and in particular maintaining a unique gateway serving the Pacific Northwest region -- is the highest and best public interest use of these slots. It is clear that Delta is committed to growing its Seattle hub. Maintaining service at Haneda is an important part of the carrier’s future service plans for Tokyo -- given Japan’s obvious intent to make Haneda a major international airport. The growth of Delta’s domestic connecting network at Seattle provides important new support for the flight as well as high quality aviation jobs. For these reasons, the Delta Master Executive Council, the Delta chapter of the Air Line Pilots Association, International reiterates its strong support for Delta’s application.

By: Delta MEC, Michael Donatelli


 

January 23, 2015

Letters in Support of Delta Air Lines
Washington Congressional Delegation, Mayor of Seattle, Seattle City Council, King County Executive, Bellingham Int'l Airport, Boise Airport, Glacier Park Int'l Airport, Juneau Int'l Airport, Missoula Int'l Airport, Tri-Cities (Pasco) Airport, Walla Walla Regional Airport, Yakima Air Terminal

By: Port of Seattle, Mark Reis


 

January 27, 2015

DOT Memorandum - Notice of Communication

On January 14, 2015, Sam Ricketts of Governor Jay Inslee of Washington's office left each of us a substantially similar voicemail requesting to speak about the Department's ongoing proceeding to consider the allocation of a pair of slots for service to Tokyo's Haneda Airport. Mr. Ricketts then sent a follow-up e-mail to both of us expressing his support for allocating the slot pair for service between Seattle and Haneda. Ms. Kurland left Mr. Ricketts a voicemail explaining that neither she nor Mr. Rogoff could discuss an ongoing proceeding.

By: Peter Rogoff and Susan Kurland


 

January 30, 2015

Support Letters for American Airlines
27 Members of California Legislature, Los Angeles City Council Members, California State Senator

Counsel: American, Howard Kass


 

February 2, 2015

Additional Support Letters for Delta Air Lines
Metropolitan King County Council, Mayor of City of Bellevue, Washington State Department of Commerce, Spokane Int'l Airport

By: Seattle-Tacoma In'tl Airport, Mark Reis

 

February 2, 2015

Bozeman Yellowstone International Airport in Support of Delta Air Lines

With Delta's recent introduction of service from Seattle to Bozeman, southwest Montana residents now have one-stop access to Delta's Asia network through Sea-Tac. Haneda airport is preferred by business travelers and educational researchers for its proximity to downtown Tokyo. Retaining this service will enhance trade ties for many of our pharmaceutical, photon and hi-tech companies doing business with Japan while bolstering international visitation to Yellowstone National Park.

By: Brian Sprenger

 

February 9, 2015

Additional Support for Hawaiian Airlines
County Council of County of Hawai'i

Counsel: Cooley LLP, Parker Erkmann, 202-776-2036


 

February 5, 2015

DOT Memorandum - Notice of Communication

On January 29, 2015, Jamie Fleet, chief of staff for Senator Maria Cantwell of Washington, called me and raised the Department's ongoing proceeding to consider the allocation of a pair of slots for service to Tokyo's Haneda Airport. Mr. Fleet wanted to make sure that the Department had received the two letters that Senator Cantwell had submitted in support of retaining Delta's Seattle-Haneda frequencyl and reiterated the importance of Haneda service to the Seattle community. I informed Mr. Fleet that I could not discuss the substance of an ongoing case, and that a summary of the communication would be placed in the docket.

By: Anthony Foxx




February 5, 2015

DOT Memorandum - Notice of Communication

On January 30, 2015, Congressman Robert Bishop of Utah called me and raised the Department's ongoing proceeding to consider the allocation of a pair of slots for service to Tokyo's Haneda Airport. Congressman Bishop noted the importance of Seattle-Haneda service for the northwest section of the country and urged DOT to retain Delta's Seattle-Haneda frequency. I informed Congressman Bishop that I could not discuss the substance of an ongoing case, and that a summary of the communication would be placed in the docket.

By: Anthony Foxx


 

Order 2015-3-17
OST-2010-0018

Issued and Served March 27, 2015

Order to Show Cause

By this Order, the Department tentatively determines that Delta Air Lines, Inc. should retain the US-Haneda slot pair currently allocated to it for daily scheduled combination services between Seattle, Washington, and Tokyo’s Haneda Airport, subject to certain strengthened conditions and protective measures designed to ensure that Delta maintains a year-round daily service in the market. The Department also tentatively selects American Airlines, Inc. for backup authority for its proposed Los Angeles-Haneda services should Delta not meet the additional conditions and requirements tentatively attached to this slot pair authority.

When the Department permitted Delta to introduce Seattle-Haneda service, it did so because it found that Delta’s proposed service would address a variety of public interest goals and would best maximize public benefits. The Department specifically noted that the Seattle-Haneda service would establish a new gateway to Haneda by providing the first nonstop Haneda service on a significant mainland US-Tokyo route that then lacked any such service. The Department also found that Delta’s proposed service would further serve the public interest by providing a number of western cities with their first one-stop connecting opportunity to Haneda, and that other cities would gain the option of service over a less circuitous northwest gateway.

Beyond that, the Department determined that an outcome that would bring first-time Haneda service and first US-flag Haneda service to the sixth-largest O&D market, while also promoting the geographic diversity of the US-Haneda gateways, would be consistent with its established approach for the award of limited Haneda slot opportunities and would best serve the public interest.

No party to this proceeding has persuasively demonstrated that the above-listed Seattle-related attributes and public benefits that were central to the Department’s previous selection of a carrier to provide Seattle-Haneda service were unsupported on the record. On the contrary, the Department tentatively believes each public interest element cited in justification of its previous decision to favor a Seattle-Haneda selection was valid then, and is still valid on the current record. Furthermore, the Los Angeles and Kona gateways that are before the Department now were also before the Department in the previous proceeding, and with the same respective carriers. In reviewing the current record and considering the competing proposals of American and Hawaiian to provide replacement US-Haneda service, the Department tentatively does not find that the relative attributes of those competing gateway/carrier proposals are sufficiently compelling to now outweigh the public benefits of daily Seattle-Haneda service.

By: Brandon Belford


 

April 6, 2015

Answer of American Airlines

The Department has thoroughly considered the issues in this proceeding and the need to ensure a scarce resource is used to benefit consumers. While American would have preferred to start Haneda service, American supports the Department’s tentative decision in Order 2015-3-17, provided American remains the backup carrier, and the conditions and requirements proposed therein are made final without relaxation. American also urges the Department to expeditiously begin negotiations with Japan to secure additional Haneda access.

American remains the only US global airline that cannot provide its own service to Haneda - the most important airport in one of the most important countries in Asia. American has less Asia service than Delta and United, and gaining greater access to Asia remains a top priority for American.

American’s disappointment in not gaining Haneda access in this proceeding is heightened by Delta’s efforts to impede liberalized access to Haneda for any carrier except itself. American calls upon the Department to move beyond Delta’s past efforts to block liberalized Haneda access, and promptly renew formal negotiations with the Government of Japan to secure Haneda access for American. Further liberalization will enable American to compete with the US airlines currently serving Haneda, and provide the benefits the Department’s Order specifically recognized American’s service would produce.

Counsel: American, Howard Kass, 202-326-5153




April 6, 2015

Objections of Delta Air Lines

Delta Air Lines Inc. strongly agrees with the Department’s decision in Order 2015-3-17 that Delta “should retain the US-Haneda slot pair currently allocated to it for daily scheduled combination services.” That result is compelled by law and manifestly serves the public interest, for reasons Delta has previously explained.

Delta emphatically objects, however, to the Department’s tentative decision to impose draconian “protective measures” on Delta’s slot authority - namely, an unprecedented requirement that Delta provide a daily Haneda-Seattle flight “on each and every day of the week (7 days a week, 365 days a year),” on pain of slot forfeiture. That extreme condition is unsupported by the record; it finds no support whatsoever in Department precedent; it conflicts with the longstanding "security of route" principle by placing Delta's slot authority in perpetual jeopardy; and it would impose serious burdens on Delta and the public interest with no countervailing justification. For those reasons and others, the 365-day-a-year service mandate is an impermissible, arbitrary and capricious condition on the use of Haneda slot authority.

Fortunately, the proposed condition is unnecessary to serve the Department’s objectives. The Order correctly acknowledges that the Department has a “justifiable basis to believe that Delta [can] be relied upon” to provide year-round service based on Delta’s statements and the concrete steps Delta has taken to grow its Seattle hub. To the extent any further assurance is necessary, Delta respectfully submits that the Department is limited to imposing targeted conditions that actually address the concern that prompted reexamination of Delta’s slot authority - namely, Delta’s cutback in service during the past winter season. For example, conditioning Delta’s slot authority on 15 days of non-use (a significant restriction above and beyond the standard 90-day dormancy condition) would advance the Department’s public-interest aims by protecting against any meaningful seasonal service cutback, while at the same time avoiding the deleterious consequences flowing from an inflexible 365-day-a-year service mandate. The Department’s failure to adopt such a sensible alternative to the proposed condition - which is patently over-broad and which risks inflicting serious commercial and operational costs on Delta - will invite appellate vacatur of the proposed condition.

Counsel: Wilmer Hale, Seth Waxman, 202-663-6000; Delta, Alexander Van der Bellen, 202-842-4184




April 6, 2015

Objection of Hawaiian Airlines

The Department’s Order 2015-3-17 granting Delta Air Lines its third chance to fulfill promises to the Department to provide reliable service to Tokyo’s Haneda Airport is hard to fathom given the evidence that Delta’s scheduling practices reflect a deliberate strategy to play keep-away with these valuable service rights. More concerning is the Department’s expressed preference for “US business travelers” even when the Department’s decisions adversely impact US businesses:

Kona-Haneda service would largely benefit Japanese-originating leisure traffic, which, while important for promoting increased international tourism and economic activity in Hawaii, minimizes Haneda’s advantages to US travelers in general, and US business travelers in particular.

In the name of promoting the interest of US business, the Department action has the ironic effect of harming US businesses that rely on tourism, including resorts, hotels, restaurants, other travel companies and retailers while providing no appreciable benefit to business travelers who have multiple options to fly to and from Haneda. The Department’s misguided preference finds no basis in the Department’s enabling statute, and its application is not supported by the record of this proceeding.

While Hawaiian Airlines, Inc. presented unrebutted evidence of the significant economic benefits of its service proposal, the competing service proposals of Delta and American Airlines offered only a recipe for yet more service cutbacks and service failures. Indeed, despite requesting “a fresh evidentiary record," the Department failed to evaluate the evidence submitted; ignored evidence that Delta’s and American’s proposed services would fail and did not explain why it disregarded the evidence.

In addition, the Show Cause Order reflects a misunderstanding of the State of Hawaii and its geography. The Department appears to simply conflate Kona with Honolulu, despite the fact that the two cities are on different islands separated by 170 miles and constitute two distinctly different communities.

Counsel: Cooley LLP, J. Parker Erkmann, 202-842-7800


 

April 13, 2015

Reply of American Airlines to Objections

In the course of this proceeding, Delta Air Lines, Inc. promised to provide “daily year round” service between Seattle and Tokyo’s Haneda airport, should the Department of Transportation agree to permit Delta to retain slot authority for that service. Order 2015-3-17 simply gives Delta the chance to fulfill that promise. Delta’s objections are makeweight, as its proposed alternative, which would permit Delta to provide service as infrequently as every other week, a distant cry from the daily service that Delta promised, the Department requires, and American Airlines, Inc. will provide, if and when Delta violates its service obligation. American thus submits that the Department should reject the objections filed by Delta, as well as those filed by Hawaiian Airlines, Inc. and make final its tentative decision set forth in the Order. American also supports the Department’s award of backup authority to American.

Counsel: O'Melveny & Myers, Jonathan Hacker, 202-383-5300




April 13, 2015

Answer of Delta Air Lines to Objections of American Airlines and Hawaiian Airlines

As Delta Air Lines Inc. has explained, it has no choice but to object to the proposed conditions on its Seattle-Haneda service as unprecedented mandates that exceed the Department’s statutory and regulatory authority, are arbitrary and capricious, and reflect misguided and perhaps unintended policy judgments.

Delta will not repeat those points here. Instead, Delta files this answer to respond to the statement by American Airlines that “[t]he more Delta protests these safeguards, the more skeptical the Department should be of Delta’s willingness to abide by its daily earround service commitment” for the Haneda-Seattle route. That is a non sequitor. Delta’s objections to the unprecedented, unexpected, and unjustified 365-day-a-year service mandate in no way diminish Delta’s commitment and manifest efforts to make the Haneda-Seattle route successful. Delta’s objections to the mandate arise from the serious operational and commercial difficulties that such an inflexible mandate would create, not from a lack of commitment.

American assumes for the sake of its argument that Delta committed to uninterrupted 365-day-a-year service in applying for “daily service” for Haneda slot authority. That assumption is unrealistic and unjustified. No carrier seeking to provide “daily service” on a city-pair route has ever committed to provide service 365 days a year, without exception. No reasonable airline industry participant could assert otherwise. Indeed, the Department itself has never believed that to be the case, given its standard 90-day dormancy condition. It defies common sense to conflate the intention to provide “daily service” with an inflexible requirement of uninterrupted 365-day-a-year service. Any such commitment would be foolhardy in light of the myriad reasons an airline might need to cancel or reschedule a flight, as American is well aware. Indeed, the logic of the position is that American must not be fully committed to any route for which it would be unwilling to agree to a 365-day-a-year mandate.

Hawaiian Airlines also objects to the Order. The bulk of Hawaiian’s objections are focused on the proposed award of backup authority to American. Delta takes no position on that issue, other than to reaffirm its argument that any backup authority award must be subject to the same conditions that govern primary slot authority. Insofar as Hawaiian repeats its argument that the Haneda-Seattle route is not viable, the Department has already considered and rejected that contention, both in initially awarding Delta the Haneda slot for Seattle service as well is in the Order here (which reexamined that allocation).

For those reasons, American’s contention that Delta’s objections undermine its commitment to the route are unfounded. Delta remains firmly committed to the Haneda route, so long as it can be flown under conditions consistent with reasonable operational flexibility. And, as Delta has explained, the airline stands ready to work with the Department to create slot conditions that directly advance the Department’s public-interest objectives in a lawful, reasonable, and even-handed manner.

Out of an abundance of caution, Delta repeats that its willingness to explore alternative conditions does not waive or forfeit Delta’s objections that the Department lacks the underlying statutory and regulatory authority to rewrite unilaterally the terms and conditions of Delta’s Haneda slot authority.

Counsel: Wilmer Hale, Seth Waxman, 202-663-6000; Delta, Alexander Van der Bellen, 202-842-4184




April 13, 2015

Answer of Hawaiian Airlines to Objection

While Hawaiian Airlines, Inc. objects to the preliminary conclusions in Order 2015-3-17 of the Department of Transportation allowing Delta Air Lines to retain its authority to serve Tokyo’s Haneda International Airport from Seattle and award back-up authority to American Airline, Hawaiian also disagrees with Delta’s assertion that the Department lacks the authority to impose protective measures to ensure Delta’s use of the Seattle-Haneda authority. Indeed, in Hawaiian’s Motion to initiate this proceeding, Hawaiian requested “that the Department reopen the grant of authority in Order 2013-2-4, which approved Delta’s request to move its Detroit-Haneda frequency to Seattle, and modify the dormancy condition to require meaningful year-round service”. Because the Department has the power to determine the scope of an airline’s economic authority, the Department may revoke or modify previously granted air service rights on limited entry routes as long as the Department provides the rights holder with notice and an opportunity for a hearing. Given the full pleading cycle in which Delta had the opportunity to submit evidence, that standard has been satisfied here.

The Department should not be cowed by Delta’s argument that the Department’s conditions are a “draconian service mandate” imposed “on the basis of a single season of cutbacks” on its Seattle-Haneda route. Delta misses the forest for the trees. The Department opened the instant proceeding and imposed conditions because Delta has repeatedly broken its promises to the Department to provide reliable Haneda service.

Counsel: Cooley LLP, J. Parker Erkmann, 202-842-7800


 

Order 2015-6-14
OST-2010-0018

Issued and Served June 15, 2015

Final Order

By this Order, the Department makes final its tentative findings and conclusions set forth in Order 2015-3-17, and permits Delta Air Lines, Inc. to retain the US-Haneda slot pair currently allocated to it for daily scheduled combination services between Seattle, Washington, and Tokyo’s Haneda Airport, subject to certain strengthened conditions and protective measures that were set forth in the show-cause order which are designed to ensure that Delta maintains a year-round daily service in the market. The Department also makes final its tentative selection of American Airlines, Inc. for backup authority for its proposed Los Angeles-Haneda services should Delta not meet the conditions and requirements attached to this slot pair authority.

In Order 2015-3-17, the Department tentatively determined that no party to this proceeding had persuasively demonstrated that the Seattle-related attributes and public benefits that were central to the Department’s selection of a carrier to provide Seattle-Haneda service were unsupported on the record or that the route should be reallocated. On the contrary, the Department stated that each public interest element cited in justification of its previous decision to favor a Seattle-Haneda selection remained valid. Furthermore, the Los Angeles and Kona gateways that are before the Department now were also before the Department in the previous proceeding, and considering the competing proposals of American and Hawaiian, the Department tentatively found that the relative attributes of those competing gateway/carrier proposals were not sufficiently compelling to outweigh the public benefits of daily Seattle-Haneda service.

The Department has reviewed the objections and answers filed in response to its tentative decision, and determined that no party has presented any new argument that would lead the Department to reach a different conclusion.

Only Hawaiian contested the Department’s decision to retain Delta at the Seattle gateway, arguing that the Department should have withdrawn Delta’s authority and awarded it to Hawaiian for Kona-Haneda service. Contrary to what Hawaiian asserts, the Department fully considered the evidence and arguments made by Hawaiian regarding its Kona-Haneda service proposal and the competing proposals of Delta and American. The Department noted that Kona-Haneda service would provide certain economic and competitive benefits, and that Hawaiian has fully delivered on its promises in the Honolulu-Haneda market. The Department further noted that Hawaiian, as a non-alliance member, could enhance competition in the US-Japan market. The Department also took note of Hawaiian’s assertions in this proceeding that the Seattle-Haneda market is too small.

However, the Department tentatively determined that, for a number of reasons, retaining Seattle-Haneda service would better serve the public interest.

In Order 2015-3-17, the Department tentatively found that American’s Los Angeles-Haneda proposal offers a number of benefits that warrant its selection over Hawaiian’s Kona-Haneda proposal, and nothing in Hawaiian’s objections leads the Department to reach a different conclusion. The Department fully recognizes that Hawaiian’s proposed Kona-Haneda service would promote increased international tourism and economic activity in Hawaii that would in turn promote US export initiatives. These important benefits, however, would be derived through allocating the limited Haneda slot pair to a route that would primarily benefit Japanese-originating leisure travelers, and thereby minimize the advantages of US-traveler access to the close-in Haneda Airport.

American, on the other hand, proposes to provide service in the largest US-Tokyo O&D market in this proceeding, and would enhance competition in the Los Angeles-Haneda market. American also states that it would be prepared to implement daily Los-Angeles Haneda service promptly, within 60 days of its backup award being activated, a factor that takes on additional weight in the context of awarding backup authority.

Therefore, the Department makes final its selection of American as a backup to ensure that, should Delta not meet the terms of its Seattle-Haneda authority as revised in this proceeding or determines that it is not economically feasible to provide the promised daily service, a carrier will already be authorized to enter the market quickly without the need for further regulatory proceedings.

By: Susan Kurland


 

June 17, 2015

Slot Return of Delta Air Lines

We have determined that it is not commercially feasible to operate the slots allocated to Delta for Seattle-Haneda service on a consistent daily basis year-round because: (i) demand for Seattle-Haneda service is highly variable, peaking in the summer and declining in the winter; and (ii) Delta lacks a Japan airline partner to provide connectivity beyond Haneda to points in Japan and other countries in Asia. While Delta would prefer to continue to develop Seattle-Haneda service in competition with the American/JAL and United/ANA alliances at Haneda, Delta will follow DOT's guidance in Order 2015-6-14 and return the slots to DOT.

In order to provide a smooth transition and avoid disruption to currently booked passengers, Delta plans to operate Seattle-Haneda service under the terms of the Order through September 30, 2015, when our last eastbound flight will depart Haneda for Seattle. We will then return the slots to the Department for reallocation effective October 1, 2015. Due to currently booked loads, it is not possible to re-accommodate passengers who are booked on flights before that date. In addition, we will dismiss the pending DC Circuit litigation, which is currently subject to an abeyance order.

Every US carrier serving Japan will now have one pair of Haneda slots. Delta remains strongly opposed to any further changes to the Haneda operating rules unless and until Japan is willing to open the airport under normal open skies terms and allow Delta to relocate its Tokyo hub operation to the preferred airport. Any incremental or phased deal effective before then would be harmful and unfair to Delta as a Narita hub operator. Accordingly, we urge the US government to aggressively pursue a full opening of Haneda to allow fair and equal access by US carriers and their customers.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


 

June 19, 2015

Acceptance of Back-Up Authority by American Airlines

On June 17, Delta informed the Department that it will return the Seattle-Haneda slot pair to the Department effective October 1, 2015. Pursuant to the backup authority awarded to American in Order 2015-6-14, American hereby accepts the returned slot pair and will inaugurate Los Angeles-Haneda service.

American will meet the 60-day startup condition set by the Department in the Final Order. We will provide additional details of the Los Angeles-Haneda service to the Department in the coming weeks.

Counsel: American, Howard Kass


 

February 2015

Ex-Parte Letters to

Association of Professional Flight Attendants National President
Association of Washington Business CEO

Congresswoman Maxine Waters (CA-43)
Department of Commerce Director Brian Bonlender

Flathead Municipal Airport Authority (Glacier National Park, MT) Director

Governor of Washington
Great Falls Int'l Airport Authority Director
Hawaii State Representative Nicole Lowen
Helena Regional Airport Authority Director

IW Group Chairman and CCO

Japan-America Society of Washington Executive Director
Japan American Cultural Center Vice-Chair
King County (WA) Council Chair
King County (WA) Executive

Los Angeles County Economic Development Corporation COO
Mayor of Bellevue, WA
Mayor of Seattle, WA
Missoula Int'l Airport Director
Port of Bellingham, WA Director of Aviation
Seattle Metropolitan Chamber of Commerce President
Spokane Int'l Airport CEO

Walla Walla Regional Airport Manager
Washington Council on Int'l Trade President

By: Brandon Belford

 

February 2015

Ex-Parte Letters to:

Boise Airport Director
Congressman Don Young (AK-At Large)
Congressman Kurt Schrader (OR-5)
Congressman Mark Takai (HI-1)
Congressman Ryan Zinke (MT-At Large)
Juneau Int'l Airport Manager

Kauai Chamber of Commerce President
Senator Barbara Boxer (D-CA)
Senator Brian Schatz (D-HI)
Senator Jon Tester (D-MT)
Senator Mazie Hirono (D-HI)
Senators Patty Murray (D-WA) and Maria Cantwell (D-WA)
Trade Development Alliance of Greater Seatatle President
Yakima Air Terminal Manager
City of Billings Aviation and Transit Department
Hawai'i Construction Alliance
Mayor of the County of Hawai'i
Seattle City Council
Washington Congressional Delegation

By: Susan Kurland


 

October 1, 2015

Motion of Delta Air Lines to Revoke Backup Award

Delta Air Lines Inc. hereby Moves the Department to revoke the backup authority granted to American Airlines Inc. by Order 2015-6-14 to provide Los Angeles-Haneda service. American promised to inaugurate Los Angeles-Haneda service within 60 days of receiving backup authority. Yet, despite being on notice since June 17, 2015 that the slots at issue would be available on October 1, American has failed to file any schedules or make available for sale any Los Angeles-Haneda flights. American apparently has no intention of inaugurating the service as promised. Accordingly, the slots should be removed from American, returned to the unallocated pool, and made available to other interested carriers.

When the Department awarded American backup authority it said: “American has stated that it supports the Department’s backup selection, and stands ready to meet the Department’s accelerated 60-day startup condition. . . . American states that it would be prepared to implement daily Los-Angeles Haneda service promptly, within 60 days of its backup award being activated, a factor that takes on additional weight in the context of awarding backup authority. Moreover, after receiving notification that the slots would be available on October 1, American again reconfirmed by letter to the Department dated June 19, 2015 that “American will meet the 60-day startup condition set by the Department in the Final Order. We will provide additional details of the Los Angeles-Haneda service to the Department in the coming weeks.”

These actions are not consistent with a carrier that intends to launch a new long-haul service within 60 days. As such, American has violated the conditions of its backup award and should not be allowed to retain the authority when there are other carriers willing to use it.

Delta reluctantly returned slots that it previously held for Seattle-Haneda service because Delta could not reasonably comply with the unusually strict operating terms and conditions imposed by Order 2015-6-14. American’s backup award, as detailed above, was expressly conditioned on its ability to meet the Department’s accelerated 60-day startup condition. Given the strict conditions imposed on Delta, it would be unfair, arbitrary and capricious to allow American to violate the terms of its backup award and retain slots for Los Angeles-Haneda service that it has no intention of operating within the next 60 days. The slots should be immediately returned to the unallocated pool forthwith.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184




October 9, 2015

Reply of American Airlines to Motion of Delta Air Lines to Revoke Backup Award and Motion of American for a Startup Date Extension

As the Department is well aware, American has tried repeatedly to obtain slot times that are commercially viable. American has had numerous executives travel to Japan in order to secure slots. Three weeks ago, two senior executives, traveled to Japan to meet with JCAB and other Japanese officials on this very issue. Just last week, American also tried to secure viable Haneda slots from another Asian carrier, which unfortunately did not come to fruition. Throughout the entire process, American has kept DOT and the Department of State informed of its many efforts to secure commercially viable slots. In fact, there has been multiple correspondence and discussions between the US Government and the Japanese Government whereby the Department has sought positive resolution on behalf of American. American has left no stone unturned.

To be clear, American isn’t trying to secure more preferable daytime slot times for its Los Angeles-Haneda flights. While American and other airlines are advocating for the right to operate their nighttime slots during daylight hours, that is a separate issue and unrelated to American’s efforts to operate its Los Angeles-Haneda service (It is notable that Delta remains opposed to any changes to the current bilateral with the Japanese Government. Delta’s intransigence should not be rewarded). Here, American’s sole focus has been on obtaining nighttime slots that will enable the Los Angeles-Haneda service to provide a reasonable schedule and reasonable connectivity between Haneda and the United States for our customers.

Indeed, American is not even trying to secure better nighttime slots than Delta had for its Seattle-Haneda operation (which slots were returned to the "pool" and, though American tried to secure them, the Japanese Government refused). Rather, the current impasse is because American cannot even get slot times that allow for a semblance of a commercially viable service – a right American believes is inherent in, and fundamental to, any award of Haneda rights by the Japanese Government.

Delta seeks to equate American’s difficulties in obtaining viable slots with its decision to pull down Seattle-Haneda service that resulted in the conditions and protective measures established in Order 2015-6-14. However, the two issues are not in any way comparable. American cannot inaugurate service without commercially viable slot times, while Delta had commercially viable slots times for that service, or believed it did because it chose to commence that service.

American remains fit, willing and able to commence Los Angeles-Haneda service. Indeed, American is eager to do so for reasons explained in detail in the most recent Haneda proceeding. The current impasse is an issue that, regrettably, is at the government-to-government level and needs to be resolved before American can inaugurate Los Angeles-Haneda service to the benefit of the traveling public. Once it is resolved, American will promptly commence the Los Angeles-Haneda service.

American requests an extension of the 60-day startup condition, until no later than the start of the Summer 2016 IATA season, to allow American, the U.S. Government, and the Japanese Government to have sufficient time to find a positive resolution to the Haneda slot issue. Once commercially viable slots are made available to American, it will promptly inaugurate Los Angeles-Haneda service and hopes to do so far sooner than the start of the Summer 2016 IATA season.

American respectfully requests that the Department grant this motion for an extension of the 60-day startup date condition that American needs to obtain commercially viable slot times to inaugurate Los Angeles-Haneda service.

Counsel: American, Howard Kass, 202-326-5153


 

October 16, 2015

Reply of Delta Air Lines

If Japan’s skies were truly open, US carriers would not be filling the Department’s dockets with quarrels over the meager traffic rights Japan has provided at Haneda. But until Japan is forced to live up to the promise of Open Skies, there will be inevitable contention over the best use of a mere four daily US carrier flights – out of the 650 current daily flights plus the many more that could be accommodated – that Japan has seen fit to allow at its massive four-runway airport.

So long as the Department must take on the challenge of deriving maximum public benefit from the allocation of minimal traffic rights, it will have an obligation to ensure that its allocation decisions are clear, consistent, transparent and even-handed. The Department required Delta Air Lines, Inc. to fly a full pattern of daily Seattle-Haneda service beginning on a date certain because it determined that strict adherence was necessary to ensure that the public benefits central to the slot award could be realized. (Order 2015-6-14 at 12). Delta would still be flying that route this winter season if the Department had allowed more flexible conditions.

By failing to honor the commitments it made regarding Haneda service, American has denied Seattle travelers Haneda access for naught. Delta invested substantial time and effort to make Seattle-Haneda service viable but was forced to cut back non-profitable winter flying for commercial reasons, just as American now seeks relief from its 60-day startup commitment for purely commercial reasons. American admits that it has access to valid Haneda slots; it simply wants better ones, or to be excused of its startup commitments altogether. Delta received no relief from a challenging commercial environment, and with American’s urging (American 4/13 reply at 3-8) had strict terms and conditions placed on future Seattle-Haneda operations. (Order 2015-6-14 at 10-14). Given that these severe conditions led to the return of the Haneda slots, it would be deeply unjust to allow American to violate the terms of its backup award and retain slots for service that it has no plan to operate within the next 60 days, or even within the next six months.

The Department must hold all carriers to their promises, or none. American’s failure to meet its startup commitment requires that the slots be returned to the unallocated pool.

Counsel: Delta, Robert Rivkin, 202-216-0700


 

October 21, 2015

Answer of Hawaiian Airlines to Motion of American Airlines for a Startup Date Extension and Application of Hawaiian Airlines for Award of Backup Authority

Because Hawaiian Airlines, Inc. believes that any US carrier attempting to operate the Haneda slots surrendered by Delta on October 1 would encounter the same difficulty American has in obtaining commercially viable slot times, Hawaiian does not oppose American’s motion for a startup extension. But the Department should only grant American’s motion on two conditions: (1) American should state specifically for the benefit of the Department and the participants in this proceeding what would constitute “commercially viable slot times” that would allow American to initiate the promised service; and (2) the Department should require American to initiate service within 60 days of its receipt of such commercially viable slot times. In doing so, the Department would hold American accountable for the promises it made in the underlying proceeding – to initiate service within 60 days of receiving the award of Haneda slots. Delta has questioned whether American’s intentions to operate the LAX-HND route are genuine and demanded that the slots be “returned to the unallocated pool” if American does not fulfill its promises. In Hawaiian’s view, American has presented a valid concern that warrants a startup extension, but the Department should require American to commit to an objective standard for when American will initiate service and start service within 60 days of receiving slots that satisfy the objective standard. If American fails to fulfill the requirement, the slots should revert to the Department for reallocation.

With the uncertainty surrounding the operation of Haneda slots, Hawaiian also requests the issuance of backup authority to each of the slot pairs awarded to American, Delta and United for service between the United States and Tokyo’s Haneda Airport in the above-referenced proceeding. Presently these carriers are either providing reduced levels of service from that promised in their applications to the Department or, in the case of American’s proposed service, are struggling to start service from the over-served Los Angeles gateway.

Such backup authority should be awarded to Hawaiian for a period of at least two years and should become effective: (a) if American fails to fulfill the startup condition in compliance with the Department’s orders, or (b) if any incumbent holder of Haneda slots fails to operate at the level promised or in violation of the Department’s orders. Because of the difficulty that the legacy carriers have experienced in fulfilling their mainland Haneda service commitments, Hawaiian respectfully submits that the award of backup authority to the carrier with the best Haneda service record is in the public interest. Hawaiian proposes to initiate the service it has proposed previously in this proceeding from Kona International Airport to Haneda within 90-days of the receipt of any slot pair that reverts back to the Department.

Counsel: Cooley LLP, J. Parker Erkmann, 202-776-2036


 

Served October 23, 2015

Notice Shortening Answer and Reply Periods

On October 1, 2015, Delta Air Lines, Inc. filed a motion requesting that the Department revoke the US-Haneda backup authority awarded to American Airlines, Inc. On October 9, 2015, American filed (1) a response to Delta’s motion, and (2) a motion for an extension of its startup date for its Los Angeles-Haneda slot pair. On October 16, 2015, Delta filed in opposition to American’s motion. On October 21, 2015, Hawaiian Airlines, Inc. filed (1) an answer to American’s motion, and (2) an application for award of US-Haneda backup authority.

Under the Department’s regulations, answers to Hawaiian’s October 21 application for award of backup authority, would normally be due November 5, 2015, and replies to answers would normally be due November 17, 2015.

In light of the record that has already developed, and in the circumstances presented, we have decided to shorten the answer and reply periods for Hawaiian’s application for backup authority. Accordingly, answers to Hawaiian’s October 21, 2015, submission in this Docket shall be due on October 30, 2015, and replies to answers will be due on November 6, 2015.

By: Paul Gretch


 

October 26, 2015

Surreply of American Airlines to Reply of Delta Air Lines

Delta continues to pursue its Haneda vendetta against American and the United States Government through a concoction of repeated inaccuracies, disingenuous “suggestions,” and huge doses of chutzpah.

Delta began this proceeding by attempting to portray that American “has no intention of inaugurating” the coveted Los Angeles-Haneda service. Subsequently, American detailed how disingenuous and inaccurate Delta’s position was (and remains). As American unequivocally stated numerous times, it is fit, willing and able to inaugurate Los Angeles-Haneda service as soon as it receives commercially viable slot times from the Japan Civil Aviation Bureau.

Due to the limited Haneda route rights granted to US carriers by the Japanese Government, US carriers cannot afford to be assigned slots that do not provide a reasonable schedule and reasonable connectivity. Despite American’s own initiatives and the intervention of the US Government, the Japanese Government has not provided American with slots that have a semblance of commercial viability, e.g., the last proposal from the Japanese did not even allow enough time to “turn” the aircraft. American cannot launch Los Angeles-Haneda service with slot times that are doomed to fail from the outset. The Department can rest assured that when commercially viable slot times are made available to American, it will promptly start daily Los Angeles-Haneda service, as it has promised.

The clear and undeniable set of circumstances that has taken this issue out of American’s control and elevated it to a government-to-government negotiation should have been a sufficient basis to end Delta’s tirade. Instead, Delta again suggests that because the JCAB has effectively prevented American from inaugurating Los Angeles-Haneda service, American should suffer the consequences and return the slots to the Department for reallocation.

American has repeatedly stated that it has aggressively pursued all options to secure commercially viable Haneda slots. This includes Delta’s “suggestion” that American should secure slots from its partner, JAL.

Delta’s “suggestion” is highly disingenuous. As Delta is keenly aware, all carriers at Haneda, including JAL, are bound by the restriction that slot times for US operations are “nighttime” slots only. No “daytime” slots can be used for US operations. Thus, the subset of JAL’s “nighttime” slots available for US services is extremely limited. Consequently, if JAL were to cede a pair of its scarce Haneda “nighttime” slots to American, JAL would be forced to eliminate one of its own valuable nighttime Haneda flights, or accept commercially unattractive slot times for itself. American cannot ask our joint venture partner to accept such a one-sided deal.

As stated in the American Reply, and as reiterated in this Answer, American has left no stone unturned. American is ready and eager to begin service on the Los Angeles-Haneda route once the US Government and the Japanese Government find a resolution to the current impasse.

It is also worth noting that the Delta Reply highlights the height of hypocrisy and chutzpah in the very first sentence:

“If Japan’s skies were truly open, US carriers would not be filling the Department’s dockets with quarrels over the meager traffic rights Japan has provided at Haneda.”

As everyone who has been involved in US-Japan aviation issues already knows, US carriers are in the current “meager traffic rights” situation precisely because of Delta’s persistent intransigence and very public opposition in allowing US-Japan aviation liberalization to evolve. At every step since 2010, Delta has created roadblocks and obstacles to liberalizing or resolving the Haneda slot issues. If there is any finger pointing to be done for who is to blame for the limited access to Haneda, that finger must point solely to Delta.

American, once again, states for the record that it is fit, willing, and able to commence Los Angeles-Haneda service, and will do so as soon as American receives commercially viable slots. American is actively working with the US Government and the Japanese Government to quickly achieve this objective.

Counsel: American, Howard Kass, 202-326-5153


 

October 30, 2015

Reply of American Airlines to Answer of Hawaiian Airlines to Motion of American Airlines for a Startup Date Extension and Application of Hawaiian Airlines for Award of Backup Authority

Hawaiian agrees and acknowledges that American cannot inaugurate Los Angeles-Haneda service without obtaining commercially viable slots from the Japanese Civil Aviation Bureau, notwithstanding sustained and continuing efforts by American to work the US and Japanese Governments (and the Japanese Slot Coordinator) to find a resolution. Hawaiian states: “…American has presented a valid concern that warrants a startup extension…”, and does not oppose American’s motion for a startup date extension.

Hawaiian suggests that the Department should not grant American’s motion for a startup date extension without American defining what “commercially viable slot times” are. The definition of “commercially viable slot times” is well established. As American has previously pointed out in its Reply, it is only asking for slot times at Haneda comparable to the slot times utilized by the other US carriers currently serving Haneda from the continental United States, no more, but no less. It is only reasonable and fair for American to have flight arrival/departure slot times in the same windows in which United and Delta operate. American is not asking for optimal slot times, but only for slot times that ensure a reasonable schedule so its customers can enjoy the same quality of connectivity that United’s and Delta’s customers now enjoy.

As American has consistently and repeatedly stated, it wants to inaugurate Los Angeles-Haneda service as quickly as possible. Once it receives slots that fall within the window of slots provided to United and Delta, American once again confirms that it will meet the startup requirement and inaugurate Los Angeles-Haneda service no later than 60 days after receipt of commercially viable slot times. Thus, American has no objection to Hawaiian’s suggestion that the Department should require it to initiate service within 60 days of receipt of commercially viable slots times.

Throughout this proceeding, American has repeatedly stated that the Haneda slots are valuable public assets that cannot and should not be squandered by any US carrier. For that very reason, American does not object to Hawaiian’s motion for backup authority should American fail to start Los Angeles-Haneda service within 60 days of receipt of commercially viable slots.

Hawaiian agrees with American that obtaining commercially viable slot times from the JCAB is a sin qua non to launching Haneda service. American continues to work with the US Government, the Japanese Government and the Japanese Slot Coordinator to find a resolution so that American receives appropriate, commercially viable slot times at Haneda. To that end, American respectfully requests that the Department grant its motion for an extension of the 60-day startup date condition to a date no later than 60 days after the receipt by American of commercially viable Haneda arrival and departure slot times. Hopefully, this extension will give the Department and American the time necessary to work with the Japanese Government and the Japanese Slot Coordinator to achieve this objective.

Counsel: American, Howard Kass, 202-326-5153




October 30, 2015

Answer of Delta Air Lines

Hawaiian Airlines, Inc. now petitions the Department for “backup authority for the Haneda slot pairs currently held by American, Delta and United” to serve Haneda-Kona, a route that has now been rejected by the Department three separate times for providing minimal benefit to US consumers. The Hawaiian proposal should again be denied. If and when one of these limited entry slots becomes available for reallocation, the Department should make a full public interest determination.

Hawaiian claims that its desired backup authority would serve the public interest in two ways: it would assertedly allow the backup carrier to start Haneda service without delay, and it would also putatively provide a “seamless transition from an incumbent to Hawaiian will reduce the administrative burden on the Department.” Yet, as demonstrated by American Airlines, Inc. recent failure to promptly begin Haneda service from LAX, a backup awards provides no assurance of preventing substantial startup delays. In this case, there is no reason to expect Hawaiian’s demand for “commercially viable” slots would be any more successful than American’s, especially given Hawaiian lacks a (supposedly) metal-neutral joint venture partner with vast slot holdings at Haneda.

Hawaiian’s focus on the administrative burden of another route case is understandable, given that its service proposal is of minimal benefit to US consumers and unlikely to be in the public interest when compared to other future route applications, which may be submitted under changed market or regulatory conditions. The Department does not have a sufficient record before it to determine whether Hawaiian’s application provides greater public benefit than an unknown number of future applications for service from other US points. Any efficient allocation of these scarce resources can come only after a thorough examination of competing, contemporaneous applications.

Delta urges the Department to reject Hawaiian’s application. Contrary to Hawaiian’s claims, Haneda backup authority fails to minimize service interruptions between incumbent and replacement carriers. Further, rather than accepting now a proposal of minimal benefit to US consumers, the Department should wait to consider all future proposals if Haneda slots become ripe for reallocation.

Counsel: Delta, Christopher Walker, 202-842-3949




October 30, 2015

Answer of United Airlines

In addition to being beyond the scope of the instant proceeding and unprecedented, the Hawaiian Application contains a number of erroneous claims that United wishes to clarify for the record.

Hawaiian baldly asserts that United is providing “reduced levels of service” compared to what was described in its application, that the San Francisco-Haneda market “cannot sustain the capacity presently flying,” and that United has a “demonstrated track record of failing to fulfill [its] service commitments.” Each of these statements is entirely without merit, as United is operating its San Francisco-Haneda service in accordance with the Department’s terms and conditions. United was clear in its application for San Francisco-Haneda service that it may switch to the B-787 aircraft at a future date and the Department acknowledged this fact in its granting order. See Order 2014-4-6 at 2 (“United proposes daily service from San Francisco…using B-777 aircraft, and later using B-787 aircraft as they are added to United’s fleet”). Moreover, the Department has previously rejected Hawaiian’s baseless claim that United’s choice of the B-787 aircraft somehow demonstrates that the San Francisco-Haneda market is not strong enough to support its service. See Order 2014-2-23 at 5. Finally, United now plans to operate 252-seat B-787-9 aircraft in the San Francisco-Haneda market – thus offering nearly the same capacity as United’s current 269-seat B-777-200 service.

United also notes that Hawaiian’s request for backup authority is unprecedented in its breadth and outside the scope of the instant proceeding, which stems from American’s need to seek a startup extension for services using its backup award. See Motion of Delta to Revoke Backup Award dated October 1, 2015. The Department has not only historically elected not to award backup authority to primary US-Haneda slot awards (see Orders 2014-4-6, 2013-2-4 at 5, and 2010-7-2 at 8), but it tied backup authority to a specific slot award on the only occasion that it was inclined to do so. See Order 2015-6-14 at 15 (selecting American over Hawaiian for a backup award to Delta’s primary award). Hawaiian has not presented any justification for the Department to deviate from this precedent.

Counsel: Crowell & Moring, Marc Warren, 202-624-2500


 

November 4, 2015

Notice of American Airlines of Receipt of Slots

American is pleased to notify the Department of Transportation that on December 31, 2015, American will take receipt of commercially viable slots to inaugurate Los Angeles-Haneda service. As represented throughout the proceeding, American will uphold its startup date commitment and begin service within that 60 day window.

American plans to begin service on February 11, 2016, and it has loaded schedules in the reservations systems that reflect that startup date. It has also issued the attached press release announcing service starting on February 11, 2016. Yet, circumstances unknown by American now could delay that startup and, to avoid American having to file another request with the Department and take up valuable Department time and resources, American is asking that the Department grant American’s request to delay the startup for the full 60 days after American’s receipt of the slots from the Haneda Slot Coordinator – i.e., until February 29, 2016. However, to be clear, American intends to commence Los Angeles-Haneda service on February 11, 2016.

LAX-HND
AA27
Departs LAX at 6 p.m.
Arrives at HND at 11 p.m. the following day

HND-LAX
AA26
Departs HND at 1:30 a.m.
Arrives at LAX at 6:20 p.m.

Counsel: American, Howard Kass, 202-326-5153


 

November 6, 2015

Reply of Hawaiian Airlines to Answers of American Airlines, Delta Air Lines and United Airlines

Hawaiian respectfully submits that the extensive administrative record demonstrating Hawaiian’s commitment to serving Tokyo’s Haneda Airport, the benefits of its Kona service proposal and the lack of a viable alternative Haneda service proposal warrants the grant of Hawaiian’s application for backup authority.

American’s answer supports Hawaiian’s position. American agreed with Hawaiian’s long held belief “that the Haneda slots are valuable public assets that cannot and should not be squandered by any US carrier” and “[f]or that very reason, American does not object to Hawaiian’s motion for backup authority should American fail to start Los Angeles-Haneda service.” In addition, American’s answer does not oppose the grant of backup authority to Hawaiian with respect to Delta’s or United’s Haneda slot pairs.

On November 4, 2015, American filed a notice in this docket informing the Department that on December 31, 2015 American will take receipt of slots it believes are commercially viable and enable it to inaugurate Los Angeles-Haneda service. Consistent with Hawaiian’s prior pleading in this docket, Hawaiian does not object to American’s request for a startup extension until 60 days after the receipt of the commercially viable slots.

Delta opposed Hawaiian’s motion on the grounds that the Department has previously rejected Hawaiian’s Kona application and “a full public interest determination” should be required before the Department reallocates any limited entry slot that becomes available. Delta’s argument misinterprets the record in this proceeding and ignores the reasoning behind the Department’s Notice of October 23, 2015, which shortened the answer periods for Hawaiian’s Application “[i]n light of the record that has already developed.” As noted in Hawaiian’s Application, the Department has identified a number of public interest benefits from Hawaiian’s Kona proposal, recognizing that Hawaiian “would provide certain economic and competitive benefits, and that . . . . Hawaiian, as a non-alliance member, could enhance competition in the US-Japan market.” The Department’s findings are based on an extensive administrative record from earlier this year in which no carrier submitted a competing proposal other than American’s Los Angeles service at issue here or Delta’s failed Seattle service. Given that Hawaiian is the only carrier in this proceeding to fulfill all of its commitments to start and maintain Haneda service levels and the prospect of more Haneda service in the Los Angeles market overwhelmed with capacity, the award of backup authority to Hawaiian is more than justified.

United’s answer contains the statement that “Hawaiian’s request for backup authority is unprecedented in its breadth and outside the scope of the instant proceeding”. The irony of United’s statement is amusing. First, Hawaiian’s application is squarely within the scope of this proceeding. Hawaiian submitted its application in the long-running docket that the Department has established for consideration of issues related to the allocation and reallocation of authority to serve Haneda.

Second, Hawaiian’s application is not unprecedented. United appears to have forgotten its own pleadings in this very docket. On March 29, 2011 after Delta had announced that it had suspended Haneda service, United filed an application seeking the following relief: “Continental and United request the issuance to them of back-up authority to Delta and the other carriers awarded slots at Tokyo’s Haneda Airport in the above referenced proceeding.” Hawaiian’s current Application seeks exactly the same relief. While the Department did not award backup authority in 2011, the Department’s most recent Haneda order departed from this precedent and awarded backup authority to American. Indeed, the Department routinely grants requests for backup authority on limited entry international routes, and it should do so here where Hawaiian submitted the only viable alternative application in the most recent Haneda allocation proceeding.

To ensure that the these valuable bilateral rights are used and to avoid the burden of another contested and unneeded proceeding, Hawaiian respectfully requests that the Department award backup authority to Hawaiian for at least two years so it can initiate service to Kona (a) if American fails to fulfill the startup condition in compliance with the Department’s orders, or (b) if any incumbent holder of Haneda slots fails to operate at the level promised or in violation of the Department’s orders.

Counsel: Cooley LLP, J. Parker Erkmann, 202-776-2036


 

November 9, 2015

Motion of American Airlines for Startup Extension

On October 9, 2015, American filed a motion seeking an extension of the startup conditions on its Haneda service until no later than the start of the Summer 2016 IATA season. Only Delta answered in opposition to American’s motion.

In supporting American’s request for a startup date extension, Hawaiian raised other issues for which the Department set a procedural timetable that ended last Friday. In the interim, American filed a notice informing the Department that it was to receive viable slots from the Haneda Slot Coordinator effective December 31, 2015, and, thus, was prepared to begin service by February 29, 2016 – i.e., within 60 days of the receipt of those slots.

American’s intent is to begin service on February 11, 2016, but in its October 9, 2015 Notice, it requested an extension until February 29, 2016 just in case there is an unanticipated delay in inaugurating the service.

When the comment period closed on Friday, there were no comments filed in opposition to American’s motion for a startup date extension. Thus, the Department should immediately grant American’s motion for a startup date extension. Other motions dealing with backup authority and service withdrawal can be decided later by the Department.

American’s Notice significantly shortened the period for which American is seeking a waiver. Thus, any objections to its Notice would be solely for mischievous purposes.

Therefore, American respectfully requests that the Department grant without further delay its revised motion for a startup extension to inaugurate Los Angeles-Haneda service by February 29, 2016

Counsel: American, Howard Kass


 

Order 2015-11-23
OST-2010-0018

Issued and Served November 25, 2015

Order Approving Request of American Airlines for Startup Extension and Dismissing Motion of Delta Air Lines to Revoke American's Authority

The Department has decided to approve the request of American for an extension of the startup date until February 29, 2016. The Department has also decided that the public interest warrants the selection of Hawaiian’s Kona-Haneda proposal as a backup to American’s Los Angeles-Haneda slot pair.

The Department finds nothing on the record to suggest that, despite a brief startup delay, the anticipated benefits of American’s Los Angeles-Haneda service – benefits that led the Department to award it this authority – will not be forthcoming. American states that it is fit, willing and able to begin the new service, that it has now successfully secured the necessary slot times to introduce Los Angeles-Haneda service on February 11, 2016, and that it has loaded schedules in the reservations systems that reflect that startup date.

In these circumstances, the Department finds no persuasive argument in Delta’s motion or subsequent pleadings that would warrant revocation of American’s authority.

The Department will therefore grant American the requested startup extension, and will require that American inaugurate Los Angeles-Haneda service no later than February 29, 2016. The Department will also dismiss Delta’s motion to revoke American’s backup award.

The Department has also decided to grant Hawaiian backup authority to American’s Los Angeles-Haneda slot pair, and to grant that backup authority to Hawaiian for a period of two years.

In light of the Department’s recent decision to award two-year backup authority to American for the Los Angeles-Haneda slot pair, and the fact that the backup authority has now been activated, the Department finds that additional backup protection would be in the public interest to ensure that maximum public benefits are achieved with this limited Haneda opportunity. Hawaiian’s Kona-Haneda proposal has remained consistent with the Kona-Haneda proposals it submitted in 2012 and 2013. In those circumstances, the Department finds that approval of Hawaiian’s request for two-year backup authority to American’s Los Angeles-Haneda slot pair authority would be consistent with the public interest.

Hawaiian’s authority would become activated if American defaults on the terms and conditions imposed on its Los Angeles-Haneda authority, and Hawaiian notifies the Department that it is in a position to implement the proposed Kona-Haneda services.

The Department has decided to impose a startup condition on the backup award, and will require Hawaiian to institute its proposed service within 90 days of the activation of its backup award. Should the backup award be activated, the allocation of the slot pair to Hawaiian would remain in effect indefinitely, subject to the Department’s standard 90-day dormancy condition.

By: Susan Kurland


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