BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

____________________________________ ) Motions and Applications of ) ) HAWAIIAN AIRLINES, INC. ) ) Docket DOT

- OST

- 2010

- 0018 AMERICAN AIRLINES, INC. ) ) in the matter of 2010 U.S.

- Haneda ) Combination Services ) Allocation Proceeding ) ____________________________________)
CONSOLIDATED REPLY OF HAWAIIAN AIRLINES, INC. Communications with respect to this document should be addressed to: Mark B. Dunkerley President & Chief Executive Officer Peter Ingram Executive Vice President and Chief Commercial Officer Hoyt H. Zia Senior Vice President, General C ounsel & Corporate Secretary Hoyt.Zia@hawaiianair.com Hawaiian Airlines, Inc. P.O. Box 30008 Honolulu, HI 96820

- 0008 J. Parker Erkmann Jonathan B. Hill Geoff Rapoport Cooley LLP 1299 Pennsylvania Ave., NW Suite 700 Washington, DC 20004 (202) 842

- 7800 (202) 842

- 7899 (fax) jhill@cooley.com perkmann@cooley.com grapoport@cooley.com Counsel for Hawaiian Airlines, Inc.

January 20, 2015DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 1 of 16

BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

____________________________________ ) Motions and Applications of ) ) HAWAIIAN AIRLINES, INC. ) ) Docket DOT

- OST

- 2010

- 0018 AMERICAN AIRLINES, INC. ) ) in the matter of 2010 U.S.

- Haneda ) Combination Services ) Allocation Proceeding ) ____________________________________) CONSOLIDATED REPLY OF HAWAIIAN AIRLINES, INC. This pr oceeding presents the Department of Transportation (“Department” or “DOT”) with a policy choice . On the one hand, Hawaiian Airlines, Inc. (“Hawaiian”) has proposed a viable commercial service between Tokyo’s Haneda International Airport (“Haneda” or “HND”) and Kona International Airport (“Kona” or “KOA”) that has undisputed public interest benefits:

• Hawaiian’s Kona proposal will stimulate traffic growth in the Tokyo

- Kona mar ket, increasing the number of tourists visiting the United States and leading to more economic growt h 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 foot print against the major alliances.DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 2 of 16
American Airlines (“American”) and Delta Air Lines (“Delta”), on the other hand, make arguments laced with economic jingoism that the ir proposed services would benefit more U.S. passengers than Hawaiian’s service . Besi des 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 failur e, and American proposes to inject more capacity into a market , Los Angeles (“LAX”) , that cannot absorb it. Indeed, by proposing to use the same flight numbers as its current LAX

Narita (“NRT”) 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. Neverthele ss, both Delta and American assert that the benefits of their connecting opportunities will save their respective proposals, but the benefits of their proposed connecting service s 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 carrier s ’ proposals , the Department should select Hawaiian’s proposal to serv e Kona so the Department can be assured that public interest benefits will result. I. The Benefits of Foreign Originating Traffic Resulting from Hawaiian’s Proposal Outweigh the Benefits Proposed b y American and Delta. Delta and American would have the Department dismiss the benefits of Hawaiian’s application because “U.S. businesses should receive public interest priority over Japan’sDOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 3 of 16

tourists.” 1 This line of argument is fundamentally misguided
. As a threshold matter, both American and Delta have argu ed that the Department should favor particular U.S. business interests while ignoring the Administration’s tourism policy and the Department’s broader public interest mandate . The fact s are that the greatest beneficiaries of Hawaiian’s proposal will b e U.S. businesses and workers
. Indeed, American’s and Delta’s argument to elevate the ir particular business interests above the public at large and without any attempt to quantify the benefits finds no support in the statute or Department policy. See 49 U.S.C. § 40101 ; see HA

2015R

- 108
. First , contrary to the arguments of Delta and American, the largest beneficiaries of Hawaiian’s service will be U.S. businesses and workers , not the Japanese businesses and workers benefited by Delta’s and American’s proposals
. Delta and American would prefer that the Department ignore the stated policy of the Obama Administration encouraging tourism, which recognizes the significant economic power of the tourist dollars that Hawaiian would bring to the United States. Due to multiplier effects, the value to the U.S. economy extends far beyond the dollars spent by the tourists themselves.

1 Consolidated Answer of Delta Air Lines, Inc. , DOT

- OST

- 2010

- 0018 (Jan. 12, 2015), hereinafter “Delta Answer” , at 9 ; see also Consolidated Answer of American Airline, Inc. , DOT

OST

- 2010

- 0018 (Jan. 12, 2015), hereinafter “American Answer” , at 10 (“As a result, Japanese travelers , not U.S. travelers, will be the overwhelming beneficiaries of any Hawaiian Haneda service to Kona”).DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 4 of 16

See HA

- 2015R

- 101. Because Hawaiian ’s proposal will stimulate much more traffic than Delta’s and American’s service and Japanese tourists spend more money when they visit Hawaii than when they visit the mainland U.S. , 2 the economic impact of Hawaiian’s service will be much greater . See HA

- 2015R

- 116
. Hawaiian’s Kona flight will have a much more significant impact on U.S. gross domestic product than American’s flight. See HA

- 2015R

- 103 ($117 million per year for Hawaiian’s compared to $34 million for American’s). This additional sp ending would create nearly 1,000 more U.S. jobs than American’s proposal.

2 See Exhibit HA

- 2015A

- 601.DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 5 of 16

See HA

- 2015R

- 10 2 . Given the dearth of traffic on Delta’s proposed S eattle service, the results tilt even more heavily in Hawaiian’s favor. Hawaiian’s service will increase U.S. GDP by 15 times the amount of Delta’s proposal, see HA

- 2015R

- 105, with a similar disproportionate impact on U.S. jobs.DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 6 of 16

See HA

- 2015R

- 104. Perhaps , being aware of the futility of comparison , Delta and American do not even attempt to estimate the economic impact of their services. See HA

- 2015R

- 108
.DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 7 of 16
Second, promotion of the tourism and the economic benefits that derive therefrom is a stated goal of the Obama Administration. As pointed out in Hawaiian’s answer, the promotion of tourism is a Presidential level economic priority. 3 Not only has the President given personal attention to this issue within the last year , the Department has recognized the importance of promoting tourism and economic growth in this very proceeding when it awarded Hawaiian its first Haneda slot pair: However, we tentatively find that, in addition to the service and competitive benefits outlined above, Hawaiian’s service would benefit the local Hawaiian economy. Touris m 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 worth y of decisional weight in our regulatory proceedings . We tentatively find such weight fully warranted in light of the facts presented. See DOT Order 2010

- 5

- 7 (May 7, 2010) , at 9 (emphasis added) (citing Expanded Air Services at Hawaii International Airpo rts , Order 99

- 12

- 10, issued December 10, 1999). In light of the Department ’s precedent and the Administration’s tourism policy, Hawaiian’s public interest benefit s cannot and should not be dismissed. W ith the comparative lack of benefits in the competing proposals, the record before the Department overwhelmingly favors Hawaiian’s application. See HA

- 2015R

- 108 , 116
. B. American’s and Delta’s Proposed Services Lack Public Interest Benefits. While Hawaiia n’s public interest benefits have been quantified and not refuted, the alliance carriers offer only vague promises of connecting service and traffic projections that have

3 Consolidated Answer of Hawaiian Airlines, Inc. , DOT

- OST

- 2010

- 0018 (Jan. 12, 201 5), hereinafter “Hawaiian Answer” , at 29

- 30
.DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 8 of 16
been proven wrong in prior proceedings and will not materialize after this proceeding
. 4 While both American and Delta claim that their services will benefit a wider geographic area with a larger population than Hawaii because of their supposed connecting services , the truth is that the impact of these purported “connections” wi ll be minim al. 1. American’s Claims of Public Interest Benefits Are Exaggerated. American’s argument that its public interest benefits will exceed Hawaiian’s proposed benefits comes down to the fact that it proposes to offer more connections and therefore provide
serv ice to a wider geographic area. 5 This is an apples

- to
- oranges comparison between Hawaiian’s strong local service offering 6 and the promise of connecting service offered by American. The problem with American’s argument is that experience has demonstrated that connections over the mainland U.S.

- Haneda gateways have a minimal market impact, averaging less than 3% market share of the Tokyo markets served. See HA

- 2015R

- 109. T hat performance will not improve f or American’s HND

- LAX service
. As shown in HA

- 20 15R

- 110 , American’s total market share in connecting markets over LAX will average only 2.2%
.

4 Hawaiian Answer at 39

- 40, 49. 5 See American Answer at 10. 6 American makes an analogy between Hawaiian’s proposal and JAL’s former nonstop service in only one direction between Narita and Kona. American Answer at 11. The comparison is inapt. Not only will Hawaiian’s service originate from the preferred gateway to Hawaii (Haneda) , see HA

- 2015A

- 213, but Hawaiian proposes nonstop service in both directions and , unlike JAL , offers an extensive schedule of flights within Hawaii to provide for multi

- destination vacations
. Moreover, the evidence is overwhelming that Hawaiian’s proposed service will generate more public interest benefits than American’s redundant proposal and D elta’s failed service. See, e.g., HA

- 2015R

- 116
.DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 9 of 16

See HA

- 2015R

- 111. American ’s LAX proposal offers few unique connecti ons . On th os e unduplicated routes , American would have far less traffic than the local O& D in Hawaiian’s proposed Haneda

- Kona route. See HA

- 2015R

- 112 (showing that HND

- KOA will have three times as many Tokyo MIDT passengers and thirty times more Haneda MIDT passengers than American’s unduplicated connections). The fact is that the impact of American’s proposal on its claimed larger service area will be miniscule , while t he grant of Hawaiian’s application would be a meaningful boost to the economy of the Hawaiian Islands. HA

- 2015R

- 106

- 07.DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 10 of 16

American’s service is not needed and therefore will no t deliver the promised benefits. With 14 weekly Haneda frequencies offered by Delta and ANA and 56 weekly round trips overall , LAX is well served from Tokyo. See Hawaiian Answer at 44

- 45. Adding more capacity will result in lower load factors than Delta ’s failed Seattle service
. 7 American’s superfluous additional capacity simply will make the market uneconomic. American’s only alternative , which they recognize d by using the same flight numbers for their present Narita service and their proposed Haneda s ervice, is to cut its Narita service, eliminating any incremental benefit to American’s proposed service. 2. Delta ’s Seattle Service Does Not and Will Not Provide Meaningful Public Interest Benefits. Delta responded to Hawaiian’s application by making the structural argument that the State of Hawaii should not receive another Haneda frequency over its Seattle service. See Delta Answer at 9. Instead, Delta believes it should retain the Seattle frequency to preserve connecting opportunities for the small number of passengers in the Pacific Northwest region. See id. at 2. But allowing Delta to retain the frequency will only result in public interest benefits if Delta actually flies the route and passengers a ctually board the aircraft when it does . So far, Delta has been unwilling to fly the route, and the passengers have not used the service on the few occasions Delta has flown it. 8

7 See HA

- 2015A

- 930 (forecasting lower load factors than Delta’s failed service ) 8 See HA

- 2015A

- 1002 (depicting Delta’s choosing not to operate 248 available HND

- SEA flights ) ; HA

- 2015A

- 1004 (depicting Se attle

- Haneda load factor lower than the other failed Haneda routes).DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 11 of 16
Although Delta argues that investments in its Seattle hub will save the Se attle

- Haneda service, that growth will not make a difference. First, as discussed in Hawaiian’s Answer, the additional flights Delta has added to Seattle will not significantly increase the number of connections or passengers on the routing
. See Hawaiian Answer at 37. As with American’s proposal, the connecting traffic is too small to have any impact on load factors to Haneda. See HA

- 2015R

- 109, 111. Second, even assuming rapid growth at Delta’s Seattle hub, the HND

- SEA traffic will trail HND

- KOA by a large margin. Indeed, the number of onboard passengers would have to increase 139% to equal Hawaiian’s HND

- KOA traffic forecast, which seems unlikely
w hen Delta’s Answer bragged that its summer

- season performance “improved by 54% percent year - over - year.” 9 Delta has no smaller aircraft to fly this route than it presently uses and therefore the route cannot succeed.

9 Delta Answer at 3 (emphasis in original). Delta’s 2014

- 15 winter season performance will undoubtedly decline, as it has cancelled all but 17 flights.DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 12 of 16

HA

- 2015R

- 115
. The Department should award the frequency to the proposed market where it is needed 10 instead of keeping it in a market that just has not worked.

10 See HA

- 2015R

- 1 13 (demonstrating that even before stimulation KOA is underserved relative to LAX and SEA).DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 13 of 16

II. The A vailability of the Customs & Border Patrol /Federa l Inspection Service Facility in Kona Will Not Delay the Start of Hawaiian’s Proposed Service
. American makes much ado about the U.S. Customs and Border Protection (“CBP”) and Federal Inspection Service (“FIS”) facilities at Kona. Hawaiian is well aware of this issue , but it will not prevent Hawaiian from commencing service in a timely manner. T he facility that had been used at Kona to support JAL’s flights remains in place. Moreover , Hawaiian has received pledges of support from both state and federal officials to both reopen the necessary facilities in the short term and provi de a long

- term solution. 11 Hawaiian therefore has every expectation that it will operate nonstop service to Kona within 90 days after the receiving the award from the Department. 12

11 See Gov. David Ige, Letter to Hon. Anthony Foxx, (Jan. 9, 2015) (attached as HA

- 2015R

117 ) (“My administration will work with our partners in the federal government to ensure that Kona International Airport will be ready to receive these passengers when Hawaiian initiates ” Haneda

- Kona service) ; Sen
. Brian Schatz , Letter to Hon. Anthony Foxx (Ja n. 1 6 , 2015) (attached as HA

- 2015R

- 118) (“The State of Hawaii and Hawaii County continue to take steps to reiterate their commitment to resuming international operations at Kona. . . . I remain committed to ensuring that CBP continues to engage with the S tate and Hawaii County.”) ; Rep . Tulsi Gabbard, Letter to Hon. Anthony Foxx (Jan. 12, 2015) (attached as HA

- 2015R

- 119 ) (“CBP was located [at KOA] just a few years ago
... , infrastructure that remains today. Hawaiian’s Congressional delegation has been aggress ively working to re

- establish this CBP presence and the major factor preventing serious engagement by CBP is the lack of international flights and de mand for CBP presence at [KOA]. . . . [R]eallocation of these slots to Hawaiian Airlines would precipitate a quick resolution to this issue.”) ; Rep. Mark Takai , Letter to Hon. Anthony Foxx, (Jan. 9, 2015) (attached as HA

- 2015R

- 120 ) ; Mayor Billy Kenoi , Letter to Hon. Anthony Foxx, (Jan. 9, 2015) (attached as HA

- 2015R

- 121 )
. These officials have identified the reopening of Kona as an international gateway as a k ey to alleviating congestion at the overburdened HNL CBP/FIS facility , improving the travel experience for all international visitors to Hawaii. See HA

- 2015R

117

- 18
. 12 As shown by its actions in this proceeding, Hawaiian believes strongly that air carriers awarded Haneda authority should m eet their commitments, including compliance with the 90

- day start up condition. Indeed, Hawaiian started service using its first Ha neda slot early and has flown the route continuously , while others failed to do so
. Hawaiian fully expects to commence service as proposed. If, for any reason, the temporary unavailability of the CBP/FIS facility inDOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 14 of 16
In addition, Hawaiian submits that the Department cannot, as a matter of pol icy, use the temporary lack of staffing at any CBP/FIS facility as a decisional factor in limited entry route proceedings. Any carrier, like Hawaiian in this proceeding, proposing service to an airport currently without international service is in a class ic Catch

- 22. CBP is not likely to staff a facility at an airport without international service. If the Department views the current lack of staffing as decisional, then any application to initiate international service would be ineligible for
an award. Any s uch categorical exclusion would be contrary to the Department ’s mandate in the Federal Aviation Act to encourage new entry into air transport ation markets 13 and w ould serve to limit unjustly the expansion of international services. Instead, the Depart ment should make the award based on the relative strength of the different proposed services. III. Only Hawaiian Proposes to Compete Against the Alliance Carriers. Although Delta’s Answer discuss es the importance of promoting inter

- alliance competition , see Delta Answer at 7 , Hawaiian respectfully submits that its status as the only nonaligned carrier is a major distinguishing characteristic of its application . Especially as the U.S.

- Japan immunized joint ventures have forged their ties , it is more important than ever that the Department fulfill its responsibility to strengthen smaller air carriers. Through hard work and a willingness to undertake risk, Hawaiian has carved out a niche by catering to leisure
Kona were to prevent Hawaiian from com plying with the 90

- day startup condition, Hawaiian would be willing , after consulting with the Department , to stop at HNL so passengers could clear customs before proceeding to Kona. This procedure would be temporary, lasting only until the Kona CBP/FIS facility is fully operational
. For departing flights, Hawaiian would fly directly to HND with no need for a stop at HNL
. 13 See 49 U.S.C. § 40101(a) (13) (requiring the Department to consider “encouraging entry into air transpo rtation markets by new and existing air carriers” in its public interest analysis)
.DOT

- OST

- 2010

- 0018 2015 Reply of Hawaiian Airlines, Inc. Page 15 of 16
travelers. Its aircraft are configured to serve le isure passengers comfortably while providing exceptional value and high

- quality service. In doing so, Hawaiian has expanded its international service greatly and gained a foothold in the markets between Hawaii and Japan , which are dominated by the major a lliances. The U.S.

- Japan alliances carry many advantages, including incumbency, sheer size, and the ability to coordinate planning , pricing and schedules. Hawaiian, having none of these advantages, is up for the fight but submits that the Federal Aviatio n Act and Department polic ies that provide for immunization of the alliances also require that the Department e nsure a level playing field for nonaligned smaller carriers
. See Hawaiian Answer at 54

- 57. In a situation like this where a nonaligned smaller carrier with an unblemished record of fulfilling its commitments proposes a service that will generate superior public be n efits, including more traffic, higher load factors and greater economic benefits, the Department should award to frequency to the smal ler carrier, Hawaiian Airlines.Conclusion DOT-OST-201 0-0018 2015 Reply of Hawaiian Airlines, Inc. Page 16 of 16

As set forth in this Reply, the public interest will be best served by reallocating Delta's Haneda slot pair to Hawaiian Airlines' for its proposed Kona service.

Dated: January 20, 2015 Respectfully submitted,

J. Parker Erkmann Jonathan B. Hill Geoff Rapoport Cooley LLP 1299 Pennsylvania Ave., NW Suite 700 Washington, DC 20004 (202) 842-7800 (202) 842-7899 (fax) perkmann@cooley.com jhill@cooley.com grapoport@cooley. com Counsel for Hawaiian Airlines, Inc.CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing Consolidated Reply of Hawaiian Airlines, Inc. was served this 20 1 h day of January 2015 via email transmission or U.S. mail on the following: rnegan.lawrence@alaskaair. corn J eremy.Ross@alaskaair. corn kyle.levine@alaskaair.corn dheffernan@cozen.corn abigail.donovan@aa.corn francis.heil@aa.corn howard.kass@aa.corn robert. wirick@aa. com sascha. vanderbellen@delta.corn chris. walker@delta.com dan. weiss@united.com Thornas.bolling@united.corn steve.rnoiTissey@united.com gmurphy@crowell.com englets@state. gov finstonma@state.gov urskr@state. gov cristinasa@state. gov info@airlineinfo. com

Ambassador Kenichiro Sasae Embassy of Japan 2520 Massachusetts Ave., NW Washington, DC 20008 charles.hmmicutt@thompsonhine.com patricia.snyder@thompsonhine.com seth.waxrnan@wilmerhale.com sseiden@crowell.corn robert.finamore@dot. gov brett.kruger@dot. gov paul. gretch@dot. gov todd.homan@dot. gov brian.hedberg@dot.gov peter .irvine@dot. gov john.s.duncan@faa.gov glindsey@lawa.org ej ames@jamhoff.corn ishiwata.k@pmiseattle.org safora.i@portseattle.org Mike.Donatelli@alpa. org



# !A4-=C .bn, 

# -z!
Erin Combs

### REPLY EXHIBITS OF HAWAIIAN AIRLINES

### TABLE OF CONTENTS

Exhibit R - 101

– Japanese Visitors Create Sales, Jobs and Earnings for U.S. Exhibit R - 102

– Hawaiian’s Kona Flight Will Create Over 1,100 U.S. Jobs, Over Four Times American’s LAX Proposal Exhibit R - 103

– Hawaiian’s Kona Flight Will Increase U.S. GDP by $117 Million, Over Three Times American’s LAX Proposal Exhibit R - 104

– Hawaiian’s Kona Flight Will Create Over 1,100 U.S. Jobs, Over Fifteen Times Delta’s SEA Proposal Exhibit R - 105

– Hawaiian’s Kona Flight Will Increase U.S. GDP by $117 Million, Fifteen Times Delta’s SEA Proposal Exhibit R - 106

– Economic Impact on the State of Hawaii Will be Significant Exhibit R - 107

– Any Economic Impact for AA’s Proposed Service will be Hardly Noticed Exhibit R - 108

– American and Delta Provided No Evidence of Economic Impact of Their Services Exhibit R - 109

– The Proposed Connections on Past HND Awards Have Average Less than 3% Share of Tokyo Markets Exhibit R - 110

– American’s Total Market Size of Connecting Markets is not Meaningful when its Markets Share is Less than 3% Exhibit R - 111

– American’s Proposed LAX - HND Service Would Carry Less than 2.5% of Passengers in its Proposed Connecting Markets

– Very Similar to Previous HND Routes Exhibit R - 112

– Kona Has Over Three Times As Many Tokyo Passengers and Over 30 Times As Many HND Passengers as All of American’s Unduplicated Roundtrip Points Behind LAX Exhibit R - 113

– Even Before Stimulation, KOA is Underserved Relative to LAX and SEA Exhibit R - 114

– Forecast American LAX Passengers Will Have to be 76% Higher to Equal Forecast Hawaiian KOA - HND Levels Page 1 of 2

### TABLE OF CONTENTS

Exhibit R - 115

– Actual SEA - HND Passengers Will Have to More than Double to Equal Forecast Hawaiian KOA - HND Levels Exhibit R - 116

– Hawaiian’s KOA - HND Economic Impact to the U.S. is the Largest by Far: The U.S. Will Lose $83 Million in Sales if American is Selected and Over $100 Million in Sales if Delta Keeps SEA Exhibits R - 117 - R - 121

– Letters of Support Page 2 of 2

### JAPANESE VISITORS CREATE JOBS

### JAPANESE VISITORS CREATE SALES, JOBS AND EARNINGS FOR THE U.S. Exhibit HA

- 2015R

- 101 Docket OST

- 2010

- 0018 Page 1 of 1



### Japanese Visitors...

Spend Money in the U.S. and... Create Sales, Jobs and Earnings in

The U.S. 

## Japanese Visitors to the U.S.

U.S. Visitors to Japan Spend Money in Japan And Create Sales, Jobs and Earnings in Japan

Source: Graphic from http:// www.whytourismmatters.com.

### HAWAIIAN’S KONA FLIGHT WILL CREATE OVER 1,100 U.S. JOBS, OVER FOUR TIMES AMERICAN’S LAX PROPOSAL Total Employment Impact of Japanese Visitors to the U.S . Exhibit HA

- 2015R

- 102 Docket OST

- 2010

- 0018 Page 1 of 1



### AA - LAX 259 U.S. Jobs HA - KOA 1,151 U.S. Jobs

Source : Exhibits HA - 2015A - 614. Note that Hawaiian estimated AA LAX - HND economic impacts. AA has claimed no new jobs.

### HAWAIIAN’S KONA FLIGHT WILL INCREASE U.S. GDP BY $117 MILLION, OVER THREE TIMES AMERICAN’S LAX PROPOSAL

Annual Incremental GDP Impact of Japanese Visitors to the U.S. (Millions) Exhibit HA

- 2015R

- 103 Docket OST

- 2010

- 0018 Page 1 of 1



# $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$$ HA - KOA +117 Million GDP AA - LAX +34 Million GDP



# $ = $1 Million

Source : Exhibits HA - 2015A - 616. Note that Hawaiian estimated AA LAX - HND economic impacts.

### HAWAIIAN’S KONA FLIGHT WILL CREATE OVER 1,100 U.S. JOBS, OVER FIFTEEN TIMES DELTA’S SEA PROPOSAL Total Employment Impact of Japanese Visitors to the U.S . Exhibit HA

- 2015R

- 104 Docket OST

- 2010

- 0018 Page 1 of 1



### HA - KOA 1,151 U.S. Jobs DL - SEA 75 U.S. Jobs

Source : Exhibits HA - 2015A - 614. Note that Hawaiian estimated DL SEA - HND economic impacts. DL has claimed no new jobs.

### HAWAIIAN’S KONA FLIGHT WILL INCREASE U.S. GDP BY $117 MILLION, FIFTEEN TIMES DELTA’S SEA PROPOSAL

Incremental GDP Impact of Japanese Visitors to the U.S. (Millions) Exhibit HA

- 2015R

- 105 Docket OST

- 2010

- 0018 Page 1 of 1



# $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $$$$$$$$$$$ $ $ $ $ $ $ $ $ HA - KOA +117 Million GDP DL SEA +8 Million GDP



# $ = $1 Million

Source : Exhibits HA - 2015A - 616. Note that Hawaiian estimated DL SEA - HND economic impacts.

### ECONOMIC IMPACT ON THE STATE OF HAWAII WILL BE SIGNIFICANT Exhibit HA

- 2015R

- 106 Docket OST

- 2010

- 0018 Page 1 of 1



## Annual Economic

Impact /1



## $84 per Resident per Year

1/ From Exhibit HA - 2015A - 614. 2/ From Consolidated Answer of American Airlines, Inc. page 10 . 

## $117 Million Hawaii Population /2



## 1.4 Million

### ANY ECONOMIC IMPACT FOR AA’S PROPOSED SERVICE WILL BE HARDLY NOTICED Exhibit HA

- 2015R

- 107 Docket OST

- 2010

- 0018 Page 1 of 1



### Annual Economic

Impact /1



## $0.88 per California Resident per Year $0.17 per U.S. Community Resident per Year

1/ From Exhibit HA - 2015A - 614. 2/ From Consolidated Answer of American Airlines, Inc page 10 . 

## $34 Million California Population /2 

## 38.8 Million American’s Claimed Served Communities’

Population /2 

## 194.6 Million

### AMERICAN AND DELTA PROVIDED NO EVIDENCE OF ECONOMIC IMPACT OF THEIR SERVICES

$117

$0 $20 $40 $60 $80 $100 $120 $140

HA KOA-HND AA LAX-HND DL SEA-HND Annual Economic Impact (U.S. GDP/Sales) - Millions



### No Evidence Supplied Exhibit HA

- 2015R

- 108 Docket OST

- 2010

- 0018 Page 1 of 1



### No Evidence Supplied

Note: American and Delta have not provided economic impact estimates. Hawaiian estimated their economic impact using the sa me method as KOA. See Exhibits HA - 2015A - 613 - 622. Source : Exhibit HA - 2015A - 616.

### AMERICAN’S LARGE PASSENGER POOL IN CONNECTING MARKETS HAS NEGLIGIBLE VALUE AND NEGLIGIBLE MARKET SHARE

### THE PROPOSED CONNECTIONS ON PAST HND AWARDS HAVE AVERAGED LESS THAN 3% SHARE OF TOKYO MARKETS

% of Tokyo Passengers in Originally Proposed Connecting Markets Using HND Flights

Source: Exhibit HA - 2015A - 16 - 19.Via DL LAXHND 2.4%

Via Other Routings

97.6% Via DL SEAHND 1.6%

Via Other Routings

98.4% Via AA JFKHND 2.9%

Via Other Routings

97.1% Exhibit HA

- 2015R

- 109 Docket OST

- 2010

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### AMERICAN’S TOTAL MARKET SIZE OF CONNECTING MARKETS IS NOT MEANINGFUL WHEN ITS MARKET SHARE IS LESS THAN 3%

1/ Includes all 32 of AA’s proposed connections. 2/ Uses historical HND case adjustment factor for direct booking of 1.35. 3/ From Exhibit HA - 2015A - 927. Tokyo MIDT Passengers AA Claimed LAX - HND Connecting Market /1 (YE September 2014) New York Kennedy (JFK) 310,428 San Francisco ( SFO ) 218,184 Las Vegas (LAS) 102,490 Chicago O'Hare (ORD) 99,459 Boston (BOS) 73,005 Washington Dulles (IAD) 65,412 San Diego (SAN) 59,879 Orlando (MCO) 55,689 San Jose (SJC) 42,278 Atlanta (ATL) 39,483 Houston Intercontinental (IAH) 38,258 Dallas/Ft. Worth (DFW) 35,392 Denver (DEN) 22,513 Miami (MIA) 19,862 Phoenix (PHX) 18,625 Salt Lake City (SLC) 16,791 Nashville (BNA) 15,529 Philadelphia (PHL) 10,933 Austin (AUS) 9,746 Tampa (TPA) 6,785 Charlotte (CLT) 6,707 San Antonio (SAT) 6,072 Sacramento (SMF) 3,319 Tucson (TUS) 3,134 El Paso (ELP) 2,301 Reno (RNO) 1,753 West Palm Beach (PBI) 1,409 Eugene (EUG) 1,218 Fresno (FAT) 1,139 Monterey (MRY) 455 Total - Unadjusted 1,288,248 Total - Adjusted /2 1,739,135 Forecast AA - HND - LAX Connecting Passengers /3 38,720 AA HND - LAX Share of Tokyo 2.2% Exhibit HA

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### AMERICAN’S PROPOSED LAX - HND SERVICE WOULD CARRY LESS THAN 2.5% OF PASSENGERS IN ITS PROPOSED CONNECTING MARKETS

– VERY SIMILAR TO PREVIOUS HND ROUTES

2.4% 1.6% 2.9% 2.2% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

Via DL LAX-HND Via DL SEA-HND Via AA JFK-HND Forecast AA LAX-HND % of Tokyo Passengers in Originally Proposed Connecting Markets Using HND Flights

Source: Exhibit HA - 2015A - 17 - 19 and HA - 2015R - 104. Exhibit HA

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### KONA HAS OVER THREE TIMES AS MANY TOKYO PASSENGERS AND OVER 30 TIMES AS MANY HND PASSENGERS AS ALL OF AMERICAN’S UNDUPLICATED ROUNDTRIP POINTS BEHIND LAX YE September 2014 Tokyo MIDT Passengers 56,767

18,119

0 10,000 20,000 30,000 40,000 50,000 60,000

KOA Exhibit HA

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Total of All AA Proposed “New” Roundtrip Points Behind LAX

1/ See Exhibits HA - 2015A - 922 - 924 for more detail on these markets. All connections use a reasonable maximum connect time of 4 hours. Note: MIDT sample has not been expanded to account for direct bookings and does not reflect total market size. Source: Exhibits HA - 2015A - 922 - 924 and MIDT via Travelport
. YE September 2014 HND MIDT Passengers

24,463

746 0 5,000 10,000 15,000 20,000 25,000 30,000

KOA Total of All AA Proposed “New” Roundtrip Points Behind LAX American’s unduplicated connecting markets are AUS , SAT and ELP . These are the three proposed AA roundtrip connections to HND that are not currently offered by any other carrier. /1

### KOA IS THE MOST UNDERSERVED AND WILL GENERATE MORE PASSENGERS THAN LAX OR SEA

### EVEN BEFORE STIMULATION KOA IS UNDERSERVED RELATIVE TO LAX AND SEA

66

43 81

0 10 20 30 40 50 60 70 80 90

KOA LAX SEA YE September 2014 Tokyo* MIDT Passengers per Flight

YE Q3 2014 Passengers Before Stimulation: 58,757 443,032 96 ,034 YE Q3 2014 Flights Scheduled Flights Including Proposed : 730 6,757 2,225 Passengers per Flight: 81 66 43

* Includes HND and NRT
. Note : MIDT sample has not been expanded to account for direct bookings and reflects relative but not total market size. Source : MIDT, via Travelport
. Exhibit HA

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(Without Any Nonstop Service) (With Nonstop Service) (With Nonstop Service)

### FORECAST AMERICAN LAX PASSENGERS WILL HAVE TO BE 76% HIGHER TO EQUAL FORECAST HAWAIIAN KOA - HND LEVELS

91,044 160,602

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

Forecast HA KOA-HND Forecast AA LAX-HND Forecast HND Passengers

Source : Hawaiian Answer Exhibits. 

### +69,558 +76%

From: Exhibit HA - 2015A - 508 From: Exhibit HA - 2015A - 927 Exhibit HA

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### ACTUAL SEA - HND PASSENGERS WILL HAVE TO MORE THAN DOUBLE TO EQUAL FORECAST HAWAIIAN KOA - HND LEVELS

67,274 160,602

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

Forecast HA KOA-HND Actual YE June 2014 SEA-HND Forecast HND Passengers

Source : Hawaiian Answer Exhibits. 

### +93,328 +139%

From: Exhibit HA - 2015A - 508 From: U.S. DOT, T - 100 Exhibit HA

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### HAWAIIAN’S KOA - HND ECONOMIC IMPACT TO THE U.S. IS THE LARGEST BY FAR: THE U.S. WILL LOSE $83 MILLION IN SALES IF AMERICAN IS SELECTED AND OVER $100 MILLION IN SALES IF DELTA KEEPS SEA

$34

$8 $117

$0 $20 $40 $60 $80 $100 $120 $140

HA KOA-HND AA LAX-HND DL SEA-HND Annual Economic Impact (U.S. GDP/Sales) - Millions

Note: American and Delta have not provided economic impact estimates. Hawaiian estimated their economic impact using the sa me method as KOA. See Exhibits HA - 2015A - 613 - 622. Source : Exhibit HA - 2015A - 616. 

### - $83 Million Exhibit HA

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### - $109 Million

### LETTERS OF SUPPORTExhibit HA

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