BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Motion and Application of

AMERICAN AIRLINES, INC.

in the matter of 2010 U.S.-Haneda 

Combination Services Allocation Proceeding

 Docket DOT-OST-2010-0018

CONSOLIDATED REPLY OF AMERICAN AIRLINES, INC.

Howard Kass 

Vice President – Regulatory Affairs

Robert A. Wirick

Managing Director, Regulatory and 

International Affairs

Abigail Donovan

Director, Congressional and Federal

Affairs

American Airlines, Inc.

1101 17th Street, N.W.

Washington, DC 20036

(202) 326.5153

howard.kass@aa.com

robert.wirick@aa.com

abigail.donovan@aa.com

Charles A. Hunnicutt

Patricia N. Snyder

Thompson Hine LLP

1919 M Street, NW

Suite 700

Washington, DC 20036-1600

(202) 263.4189

charles.hunnicutt@thompsonhine.com

patricia.snyder@thompsonhine.com

October 28, 2014
BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Motion and Application of

AMERICAN AIRLINES, INC.

in the matter of 2010 U.S.-Haneda 

Combination Services Allocation Proceeding

Docket DOT-OST-2010-0018

CONSOLIDATED REPLY OF AMERICAN AIRLINES, INC.

The Department should grant the application of American Airlines, Inc. 

(“American”) for the Haneda frequency held by Delta Air Lines, Inc. (“Delta”) without 

further delay. American is anxious to get into the market and provide a competitive 

alternative to existing U.S.-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 U.S. consumers the Haneda service the United States worked hard to 

obtain.

1

1. The Department Has the Right and the Duty to Withdraw the SeattleHaneda Frequency from Delta. 

Delta is providing no public benefits with its Haneda frequency, even though it is 

planning just enough service to keep it from reverting automatically to the Department. 

1 This Consolidated Reply responds to the Consolidated Answer of Delta Air Lines, Inc.; Consolidated Answer 

of the Port of Seattle; Consolidated Answer of the Delta MEC, all filed on (October 17, 2014).

October 28, 2014

 
Consolidated Reply

of American Airlines, Inc.

Page 2 of 10

It has had adequate notice of American’s challenge, and an opportunity to present its 

views. In this unique situation, the Department should withdraw Delta’s frequency and 

award it to American.

The Dormancy Condition. Delta and its supporters assert that Delta can keep its 

Seattle-Haneda frequency if it “complies with” the dormancy condition.2 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. In relevant part, the dormancy condition reads as 

follows:

The slot pair allocation will remain in effect indefinitely, . . . provided [ ] 

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 (once inaugurated);3

The dormancy condition is one tool available to the Department to ensure that scarce 

frequencies are used. Another tool available to the Department is to withdraw an 

underused valuable frequency for reallocation.

Delta’s position that a carrier can maintain frequencies but provide no public 

benefits is inconsistent with long-standing Department policy. The Department has said, 

2 Consolidated Answer of Delta Air Lines, Inc. at 3-4 (Docket DOT-OST-2010-0018, October 17, 2014). See 

also, Consolidated Answer of the Port of Seattle at 4; Consolidated Answer of the Delta MEC at 3.

3 Order 2013-2-4 at 6.

 
Consolidated Reply

of American Airlines, Inc.

Page 3 of 10

Should frequency allocations not be used, we have the power to 

reallocate them to ensure that they are used effectively and in a manner 

that best promotes competition and otherwise serves the public interest.”4

In this circumstance, U.S. carriers have only four daily flights into Haneda. 

Because U.S.-carrier service is severely limited at the airport, it is in the public interest to 

reallocate Delta’s Haneda frequency, and the Department has the right to do so.

Due Process. Delta next argues that the Department would “violate the 

fundamental fairness and due process requirements of the Administrative Procedure 

Act”5 if it withdraws Delta’s frequency. Delta is again incorrect. Of course, Delta is 

entitled to notice and an opportunity to be heard before the Department can take the 

frequency away. One indication of the appropriate procedure is in a related provision of 

the law, 49 U.S.C. § 41110(c), dealing with foreign certificate authority, which is 

instructive if not strictly applicable.

Under that provision, the Department can suspend or revoke certificate authority 

“after notice and a reasonable opportunity for the affected air carrier to present its views, 

but without a hearing.” The provision applies where a carrier has not provided “regularly 

scheduled transportation” in a market for a 90-day period.

It is not unfair to Delta to withdraw a frequency in this unique case, where Delta 

is providing no public benefits while keeping its frequency barely in force. In addition, 

Delta has had notice that its authority could be withdrawn since American’s October 2, 

2014 filing and the Department’s October 6, 2014 procedural Notice. Delta has had 

4 Final Order, U.S.-China Frequency Allocation, Order 95-2-30, OST-DOT Docket 49760 at 5 (Feb. 14, 

1995). See also, Order Instituting Proceeding, 1997 U.S.-Argentina All- Cargo Frequency Proceeding, Order 97-11-

35 at 9-10 (Nov. 20, 1997) (The value of frequencies requires DOT to “preserve maximum flexibility to respond to 

changing conditions, whether in terms of the operations of the carriers already serving, the interests of the carriers that 

might want to serve, the overall state of the applicable bilateral relationship, or any other public interest factors.”)

5 Consolidated Answer of Delta Air Lines, at 3-4 (Docket DOT-OST-2010-0018, October 17, 2014).

 
Consolidated Reply

of American Airlines, Inc.

Page 4 of 10

ample opportunity to present its views. No further process is due. In this unique 

circumstance, the Department should terminate Delta’s right and allow American to 

provide a substantially superior service.

6

2. American’s Application for Haneda Service Is Uncontested And the 

Department Should Grant American’s Application Immediately. 

The Department can legally grant American’s application for Delta’s U.S.-

Haneda frequency now. No law requires the Department to institute a full reallocation 

proceeding. Under the Ashbacker doctrine,7 when the Department considers two or more 

bona fide mutually exclusive applications, it must consider them at the same time. In its 

Motion and Answer, Hawaiian Airlines, Inc. (“Hawaiian”) does not offer a mutually 

exclusive application to the application offered by American.8

Hawaiian’s statement of future intent is not the same as an application for the 

authority. The case law is clear: Ashbacker is relevant only when multiple applicants 

apply for a mutually exclusive right.9

 No other carrier has applied for Delta’s Haneda 

frequency. The Department is under no obligation to delay American’s application.

6 See, e.g., the Department’s policy statement, Certificate Duration in Limited Entry Markets, which contains 

the following example:

[A]s an example, it is likely that we would consider a proposal of daily service in a market receiving three 

weekly flights to be substantially superior (assuming that we believe daily service to be economically and 

bilaterally feasible). 

Surely if an increase from three flights a week to seven is substantially superior, American’s proposal to provide daily 

service is substantially superior to Delta’s hiatus level of 17 flights for the entire winter season. 

7 Ashbacker Radio Corp. v. Federal Communications Commission, 326 U.S. 327, 333 (Nov. 13, 1945) (“The 

Ashbacker doctrine provides, ‘that where two bona fide applications are mutually exclusive the grant of one without a 

hearing to both deprives the loser’ of a Congressional mandated opportunity to compete for the proposed right.”).

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

American Airlines, 2010 U.S.-Haneda Combination Services Allocation Proceeding, Docket DOT-OST-2010-0018 at 6 

(Oct. 9, 2014).

9 Reuters, Ltd. v. Federal Communications Commission, 781 F.2d 946, 951 (D.C. Cir. 1986) (for Ashbacker to 

apply, multiple applications must be pending at the same time to give all parties the right to a hearing.); see also,

 
Consolidated Reply

of American Airlines, Inc.

Page 5 of 10

3. Department Action on American’s Motion And Application Is Unrelated to 

the U.S.-Japan Negotiations. 

Delta argues that allowing it to keep its dormant frequency is “critical” to the U.S. 

Government’s efforts to open Haneda. Yet, Delta offers no coherent explanation as to 

why. Instead, Delta distracts the Department’s attention by complaining that it cannot 

compete. Delta’s complaints conveniently ignore the fact that, given its Narita hub, it 

competes very effectively against other airlines and alliances, as reflected in Delta’s U.S.-

Tokyo market share of nearly 25 per cent.10

Delta’s current authorization to use one U.S.-Haneda frequency is not a 

negotiating chit. Even if it had any negotiating value, Delta’s failure to use the frequency

reduces that value to zero. It is not a negotiating chit because the Department decides 

which U.S. airline should be allowed to use limited U.S. rights – not the Government of 

Japan. The United States holds the right to have whatever carriers it chooses to operate 

to Haneda. 

Delta feigns that additional capacity at Haneda is “simply a matter of Japan’s 

political will.”11 The reality is that Delta has vigorously opposed any incremental change 

at Haneda throughout U.S.-Japan negotiations. Delta’s only objective is to move its 

entire Narita hub to Haneda. The chance of unfettered access for U.S. carriers to Haneda 

in the near term is unlikely. The Department should not permit Delta to hold the U.S. 

Government, consumers, and U.S. carriers hostage.

Seaboard & Western Airlines, Inc. v. Civil Aeronautics Board, 181 F.2d 777, 779-80 (D.C. Cir. 1949) (“The DC 

Circuit Court held when a Civil Aeronautics Board route selection proceeding is pending, the CAB “must include in the 

proceeding all pending applications for certificates” over such proposed routes.).

10 Consolidated Answer of Delta Air Lines, Inc. at 8, chart at bottom right (Docket DOT-OST-2010-0018, 

October 17, 2014).

11 Id., at 11.

 
Consolidated Reply

of American Airlines, Inc.

Page 6 of 10

If Delta is serious about changes at Haneda, then it should withdraw its insistence 

on moving its entire hub from Narita to Haneda as the only acceptable outcome during 

the next round of intergovernmental negotiations. Its analogy to the London-Heathrow 

situation within the U.S.-European Union (“EU”) talks is simply wrong. There, the 

objector was Continental Airlines, Inc. (“Continental”), which insisted that U.S. carriers 

had to have unencumbered access to London-Heathrow, despite capacity issues. Like 

Continental at the time, Delta’s extreme and unrealistic position makes it more difficult 

for the United States to reach a satisfactory arrangement on Haneda with the Government 

of Japan. 

Further, Delta complains that it is in a “uniquely difficult position” at Haneda as it 

is has no Japanese alliance partner. Delta’s position at Haneda is not unique. In the U.S.-

EU example, US Airways, Inc. (“US Airways”) was without a clear path to obtaining 

London-Heathrow slots, as it was not in an immunized alliance with a British or 

European partner. Yet, US Airways found a way to launch a U.S.-Heathrow service.

4. Delta’s Defense That Carriers Make Seasonal Adjustments Is Disingenuous

Because the U.S.-Japan Market Is Not Seasonal.

Delta contends that it is “employing a temporary seasonal adjustment, which in 

this case is intended to preserve and maintain Seattle as a viable U.S.-Haneda gateway.”12 

This contention is nonsensical and wrong.

First, the idea that an airline “preserves and maintains” a major U.S. city as a 

gateway by not serving it is risible. Delta is only preserving and maintaining its Narita 

12 Id., at 8.

 
Consolidated Reply

of American Airlines, Inc.

Page 7 of 10

hub through which it commands a whopping 24 per cent of all U.S.-Japan ASMs, as 

shown on page 8 of its Answer.

Second, the Continental U.S.-Tokyo and Continental U.S.-Haneda markets show 

very little seasonality, even though Delta claims that the reductions are “temporary 

seasonal reductions.”13 Delta produces no facts to support its statements because no 

supporting facts exist. Exhibit AA-101 shows that capacity generally remains constant 

year-round.

The data indicates that Delta is not investing in the Seattle-Haneda market, 

strongly suggesting that Delta is simply holding the frequency to the detriment of 

consumers. The chart below shows that Seattle-Haneda is the only market from the 

Continental U.S. to Haneda that has suffered severely reduced frequencies for the coming 

winter:

13 Id., at 4-6.

 
Consolidated Reply

of American Airlines, Inc.

Page 8 of 10

Exhibit AA-102 shows that Delta’s load factors at Seattle are significantly lower than 

other carriers in the Continental U.S.-Tokyo market. 

At the same time as Delta is walking away from the Seattle-Haneda market:

• Delta is actually increasing its services to Narita from Atlanta, Minneapolis, and 

JFK this winter;

• Delta has not reduced its Seattle-Narita services for the winter;

• Delta has increased its own Los Angeles-Haneda frequencies from last winter to 

this winter as well as its ASMs;

• United launched nonstop San Francisco-Haneda service;

• All Nippon Airways is maintaining the level of frequencies from Los Angeles to 

Haneda and will actually its increase available seat miles (ASMs); and

• Japan Air Lines’ San Francisco-Haneda frequencies will decrease by one, but its 

ASMs will increase because JAL is up-gauging from a 186-seat B788 to a 283-

seat B772 in December 2014.

Put simply, no other carrier made a “seasonal adjustment” to frequencies from the 

Continental U.S. to Tokyo this year, nor has Delta done so – except in the Seattle-Haneda 

market. Importantly, over the past year, American’s frequencies and its total ASMs from 

Chicago, Dallas/Fort Worth, and Los Angeles to Narita have remained consistent through 

the winter.

Delta complains that in 2013, American reduced the number of weekly U.S.-

Brazil frequencies in part of the shoulder season by 28 round trips, from 109 weekly 

round trips. First, unlike Delta, American Airlines is using its U.S-Brazil frequencies 

effectively. In 2013, American Airlines provided 5,170 flights to over a dozen U.S.-

Brazil city pairs.
Consolidated Reply

of American Airlines, Inc.

Page 9 of 10

Second, American and US Airways are working to integrate their services 

following the merger. That process affects all our services, including U.S.-Brazil 

services. American fully expects to communicate with the Department once its

integration plans are completed. 

Finally, Delta is wrong to compare the seasonal U.S.-Brazil market with the U.S.-

Haneda market, which shows very little seasonality. Moreover, no seasonal swings in 

traffic can explain an 88 per cent decrease in flights. 

The Department should ignore Delta’s argument that its Seattle-Haneda cutbacks 

reflect a seasonal adjustment, as there is little seasonality in U.S.-Japan markets. Instead, 

the cutbacks reflect Delta’s effort to protect its hub at Narita.

5. U.S. Carriers Can Effectively Use the Haneda Frequencies Only on the U.S. 

West Coast, Due to Their Constrained Timing.

American made a good-faith effort to make its JFK-Haneda service successful, 

but found it impossible to offer an attractive service from the U.S. East Coast given the 

current operating constraints. Indeed, American was concerned from the beginning of 

this proceeding in 2010 that the 2200 to 0700 operating window would “limit online 

connectivity between American’s proposed JFK and LAX schedules and beyond cities 

served by JAL via Haneda.”14 Delta also acknowledged that “the scheduling limitations 

at Haneda pose challenges for Eastern U.S. service.”15 Indeed, one reason Delta gave for 

transferring its frequency to Seattle was that “Seattle’s West Coast location also allows 

14 Application of American Airlines, Inc. at 6 (Docket DOT-OST-2010-0018, Feb. 16, 2010).

15 Application of Delta Air Lines, Inc. at 4 (Docket DOT-OST-2010-0018, Feb. 16, 2010).

 
Consolidated Reply

of American Airlines, Inc.

Page 10 of 10

for a more attractive and consumer friendly schedule that is a better fit with the Haneda 

operating window.”16

Despite these shared views about the viability of an East Coast gateway, Delta

criticizes American for not hoarding its valuable Haneda frequency and instead returning 

it to the Department for reallocation.17 We encourage Delta to follow American’s lead 

and return its underused frequency for immediate reallocation to American.

Conclusion

American respectfully urges the Department to withdraw the Seattle-Haneda 

authority from Delta and immediately grant American’s application to serve the Los

Angeles-Haneda market. By taking this prudent action, the Department will provide 

consumers with an opportunity to benefit from a sound policy decision, which allows

American to make effective use of Delta's vastly underused U.S.-Haneda frequency 

allocation.18

Respectfully submitted,

Howard Kass 

Robert A. Wirick

Abigail Donovan

16 Motion of Delta Air Lines, Inc. at 1 (Docket DOT-OST-2010-0018, July 30, 2012).

17 Consolidated Answer of Delta Air Lines, Inc. at 1 (Docket DOT-OST-2010-0018, October 17, 2014).

18 American also seeks such other and further relief as the Department may deem appropriate to initiate service.

 
0

50

100

150

200

250

300

350

Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

The Continental U.S.-Tokyo Market 

Is Not Seasonal Except for Delta

AA DL JL NH UA

Source: Diio, accessed October 27, 2014

Exhibit AA-101

Continental U.S.-HND

Frequencies per Month
0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

20

40

60

80

100

120

140

160

Jun-13

Jul-13

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

Apr-14

Industry Frequency Industry Load Factor

Load Factor DL SEA-HND

Source: Diio, using most recently available T-100 traffic data, accessed October 27, 2014

Excluding DL SEA-HND

Exhibit AA-102

Delta Is Not Investing in the Seattle-Haneda Market

Delta’s SEA-HND Load Factors Are Significantly Below 

Other U.S.-Haneda Operators

Continental U.S.-HND

Frequencies per Month Load Factor
CERTIFICATE OF SERVICE

I, Abigail Donovan, certify that, on October 28, 2014, I caused to be served a 

copy of the foregoing Consolidated Reply of American Airlines, Inc. by email upon those 

addressees listed below:

paul.gretch@dot.gov(DOT)

brian.hedberg@dot.gov(DOT)

brett.kruger@dot.gov(DOT)

todd.homan@dot.gov(DOT)

peter.irvine@dot.gov(DOT)

EngleTS@state.gov(Dep’t of State)

cristinasa@state.gov(Dep’t. of State)

eugene.alford@ita.doc.gov(Dep’t. of 

Commerce)

sascha.vanderbellen@delta.com(Delta)

chris.walker@delta.com(Delta)

Mike.Donatelli@alpa.org(Delta 

MEC/ALPA)

jhill@cooley.com(Hawaiian)

Perkmann@cooley.com(Hawaiian)

bberlin@cooley.com(Hawaiian)

Robert.Lamansky@hawaiianair.com(Hawai

ian)

glindsey@lawa.org(Los Angeles World 

Airports)

ishiwata.k@portseattle.org(Port of Seattle)

safora.i@portseattle.org(Port of Seattle)

dan.weiss@united.com(United)

steve.Morrissey@united.com(United)

gmurphy@crowell.com(United)

sseiden@crowell.com(United)

info@airlineinfo.com (AirlineInfo.com)

_________________________________

Abigail Donovan