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 )

____________________________________)

ANSWER OF HAWAIIAN AIRLINES, INC. TO OBJECTION

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 Couns el &

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)

perkmann@cooley.com

jhill@cooley.com

grapoport@cooley.com

C ounsel for Hawaiian Airlines, Inc.

A pril 13 , 2015DOT

- OST

- 2010

- 0018

Answer o f Hawaiian Airlines, Inc. to Objection

Page 1 of 5

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 )

____________________________________)

ANSWER OF HAWAIIAN AIRLINES, INC. TO OBJECTION

While Hawaiian Airlines, Inc. (“Hawaiian”) objects to the preliminary conclusions in

Order 2015

- 3

- 17 1 of the Department of Transportation (“Department”) allowing Delta Air Lines

(“Delta”) to retain its authority to serve Tokyo’s Haneda International Airport (“Haneda”) from

Seattle and award back

- up authority to American Airlines (“American”), Hawaiian als o

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 Departme nt reopen the grant of authority in

Order 2013

- 2

- 4 (the “Order”) , which approved Delta’s request to move its Detroit

- Haneda

frequency to Seattle, and modify the dormancy condition to require meaningful year

- round

1 See Order to Show Cause, DOT Order 2015

- 3

- 17 (issued Mar. 27, 2015) (hereinafter “Show

Cause Order”).DOT

- OST

- 2010

- 0018

Answer o f Hawaiian Airlines, Inc. to Objection

Page 2 of 5

service”. 2 B ecause 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 hea ring. 3 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” i mposed “on the basis of a single season of

cutbacks” on its Seattle

- Haneda route. 4 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 Departme nt to provide reliable Haneda service. In its opposition to Delta’s

petition for reconsideration, 5 Hawaiian catalogued these broken promises:

2 Hawaiian Airlines Motion to Reopen Order 2013

- 2

- 4 and Answer to the Motion and

Application of American Airlines, DOT

- OST

- 2010

- 0018 (Oct. 9, 2014), at 1.

3 Answer of Hawaiian Airlines, Inc. to Petition of Delta Air Lines, Inc. for Reconsideration of

Order 2014

- 12

- 19 , DOT

- OST

- 2010

- 0018 (Jan. 2, 2015) , at 5 n. 16 (citing Civil Aeronautics Bd.

v. Delta Air Lines, Inc. , 367 U.S. 316, 329 (1961) (“the Board may reconsider an effective

certificate at any time if it affords the certificated carrier notice and hearing prior to decision”)

(hereinafte r, “Hawaiian Opposition to Reconsideration”)

.

4 Objections of Delta Air Lines, Inc. to Order 2015

- 3

- 17, DOT

- OST

- 2010

- 0018 (Apr. 6, 2015),

at 6 (hereinafter, “Delta Objection”)

.

5 Hawaiian Opposition to Reconsideration at 6 n. 19 , Exhibit HA

- 1

.DOT

- OST

- 2010

- 0018

Answer o f Hawaiian Airlines, Inc. to Objection

Page 3 of 5DOT

- OST

- 2010

- 0018

Answer o f Hawaiian Airlines, Inc. to Objection

Page 4 of 5

On the record of this proceeding, the Department had far more to rely on than “a single season

cutback” to impo se its meaningful service requirements

. 6 Instead, Delta’s four

- year record of

over promising and under delivering required that the Department take action to ensure that this

valuable air service right will be used.

Delta’s abysmal Haneda performance al so must be considered in the overall context of

Delta’s strategic objectives in Japan. As an incumbent provider at Tokyo’s Narita Airport, Delta

has a vested interest in preventing expanded access to Haneda and the subsequent diversion of

traffic from its primary hub in Japan. 7 Delta also has been a staunch opponent of incremental

expansion at Haneda Airport. 8 Therefore, Delta’s practice of chronically underperforming its

Haneda commitments calls into question whether Delta has sought to retain the Seattle authority

to provide Haneda service or to prevent other carriers, like Hawaiian, from operating routes that

would compete with Delta’s Narita services. In the broader context of this proceeding, the

Department’s decision to hold Delta accountable to its Haneda service commitments is a

reasonable one.

The remarkable aspect of the Department’s Show Cause Order is that it offered Delta yet

another chance to fulfill its Haneda service commitments. Based on the evidence presented that

the Seattle

- Hane da market is not large enough to sustain a viable commercial service; the

Department should have reallocated the route. Hawaiian respectfully submits that the record of

the proceeding demonstrates that only one carrier, Hawaiian, submitted a viable servic e proposal

6 Delta Objection at 2.

7 See Hawaiian Opposition to Reconsideration at 8

- 9.

8 See Answer of American Airlines, Inc. to Order 2015

- 3

- 17, DOT

- OST

- 2010

- 0018 (Apr. 6,

2015), at 3

- 4.DOT

- OST

- 2010

- 0018

Answer o f Hawaiian Airlines, Inc. to Objection

Page 5 of 5

that will not require additional service cutbacks or cause another Haneda service failure. 9

Accordingly, as argued in the Hawaiian Objection, the Department’s failure to consider critical

evidence or explain the reason why Hawaiian’s evidence w as dismissed undermined the purpo se

of refreshing the record in this proceeding and is a violation of the Administrative Procedures

Act. 10 See Fogo De Chao (Holdings) Inc. v. U.S. Dep't of Homeland Sec. , 769 F.3d 1127, 1147

-

48 (D.C. Cir. 2014) (remanding f or “further explanation” where agency disregarded evidence

because an agency may not “close its eyes to on

- point and uncontradicted record evidence

without any explanation at all”).

Hawaiian hereby incorporates the arguments asserted in its prior pleading s in this docket and

reserves all of its rights in any subsequent proceeding

.

Respectfully submitted,

Dated: April 13 , 2015

_______________________________ 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@cool ey.com

Counsel for Hawaiian Airlines, Inc.

9 See Objection of Hawaiian Airlines, Inc., DOT

- OST

- 2010

- 0018 (Apr. 6, 2015), at 6.

10 See id.CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Answer of Hawaiian Airlines, Inc. to

Objection was served this 13 th day of April 2015 via email transmission or U.S. mail on the

following:

jeremy.ross@alaskaair.com

dheffernan@cozen.com

abigail.donov an@aa.com

francis.heil@aa.com

howard.kass@aa.com

robert.wirick@aa.com

s ascha.vanderbellen@delta.com

chris.walker@delta.com

dan.weiss@united.com

Thomas.bolling@united.com

steve.morrissey@united.com

gmurphy@crowell.com

englets@state.gov

cristinasa@s tate.gov

info@airlineinfo.com charles.hunnicutt@thompsonhine.com

patricia.snyder@thompsonhine.co m

seth.waxman@wilmerhale.com

sseiden@crowell.com

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

ejames@jamhoff.com

ishiwata.k@portseattle.org

safora.i@portseattle.org

Mike.Donatelli@alpa.org

Ambassador Kenichiro Sasae

Embassy o f Japan

2520 Massachusetts Ave., NW

Washington, DC 20008

__________________________ Erin Combs