BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Motion of DELTA AIR LINES, INC. In the matter of 2010 U.S. - Haneda Combination Services Allocation Proceeding ) ) ) ) ) ) ) Docket DOT - OST - 2010 - 0018

CONSOLIDATED REPLY OF DELTA AIR LI NES, INC
. Communications with respect to this document should be addressed to: Glen Hauenstein Executive Vice President

– Network Planning

& Revenue Management Robert J. Cortelyou Senior Vice President

– Network Planning Andreas Renner Director

– Inte rnational Network Planning DELTA AIR LINES, INC. 1030 Delta Boulevard Atlanta, Georgia 30320 Andrea Fischer Newman Senior Vice President

– Government Affairs DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005 Alexander Van der Bellen Managing Director

– Government Affairs

& Associate General Counsel DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005 (202) 842
- 4184 sascha.vanderbellen@delta.com

September 13, 2012BEFORE THE DEPARTMENT OF TRANSPORTATI ON WASHINGTON, D.C.

Motion of DELTA AIR LINES, INC. In the matter of 2010 U.S. - Haneda Combination Services Allocation Proceeding ) ) ) ) ) ) ) Docket DOT - OST - 2010 - 0018

CONSOLID A TED REPLY OF DELTA AIR LINES, INC
. The Applications and Answe rs 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 U.S.
- Haneda gateway, or whether they should be used to duplicate service in existing U.S.
- Haneda markets. Second, whether the slots should be used to preserve and enhance 3
- way alliance competition in the U.S.
- Haneda and U.S

. - Tokyo marketplace, or to further strengthen the dominant U.S.
- Japan immunized alliance s at the expense of the only unaligned U.S.
- Japan network competitor. Third, whether U.S. citizens and U.S. businesses should enjoy the important convenience of new service to Tokyo’s preferred downtown airport, or whether Japanese tourists should have a fourth Ha neda fligh t to the Hawaiian I slands. 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. 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 Han eda that are contrary to the “metal neutral” joint venture benefits it claimed to gain antitrustDelta Reply Page 2 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 competi tor 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 bear s close scrutiny and should be weighed carefully in this important decision which will have a major impact on U.S.
- Haneda and U.S.
- Japan alliance competition. I. Executive Summary Seattle is the largest U.S.
- Tokyo O&D gateway that does not have nonstop service to Haneda. It is the also the largest west coast business center without Haneda ser vice, placing Seattle and the Pacific Northwest region at a disadvantage to the existing west coast gateways of San Francisco and Los Angeles. Delta’s proposal should be ranked first for the following reasons :

• Seattle will be established as a new gateway, providing 114,000 annual Tokyo passengers with new nonstop access to Haneda. 1 New intergateway competition will be created with San Francisco and Los Angeles which both have one or more Haneda flights.

• 32 cities will receive round
- trip connections, and a n additional 10 cities will receive one
- way connecting service to Haneda via Seattle. Seattle’s geographic location provides the largest catchment area and best network coverage of the United States.

• The Pacific Northwest region will gain its first con venient access to Haneda because the existing west coast gateways are too far south and unreasonably circuitous.

• The Delta/Alaska domestic marketing alliance will allow Alaska Airlines to bring its Seattle network into play, improving service and competi tion for U.S.
- Haneda passengers. Alaska and its employees will benefit from the additional traffic flowing across their system.

• Delta’s proposal will preserve and enhance vigorous 3
- way competition among the major alliances serving Japan. Delta is the only effective competitor to the United/ANA and American/JAL immunized alliances, both of which have major hub operations at Haneda.

1 See, DL
- 201 (MIDT data adjusted to account for direct sales).Delta Reply Page 3

• Unlike United and American, Delta will create a new nonstop Haneda gateway at Seattle, rather than duplicating existing Ha neda services at San Francisco and Los Angeles.

• Unlike Hawaiian, Delta will use this limited Haneda opportunity to serve U.S. citizens and businesses, rather than transport Japanese tourists in the well served Haneda
- Hawaii marketplace. Hawaii already h as three nonstop Haneda flights while Seattle and the Pacific Northwest region have none. 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 co nsistent with market
- based principles that are fundamental to U.S. open skies policy. 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 thr ee 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. 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 U.S. mainland gateway at S eattle. 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 i nterest for the Department to deprive Delta of the Haneda slots it needs to compete with the U.S.
- Japan immunized alliances. The loss of a slot pair would marginalize Delta in the U.S.
- Haneda marketplace, leaving Delta with just a single daily flight to c ompete against the multiple daily transpacific flights and large Haneda hubs operated by Star and oneworld. This would increase market dominance by the U.S.
- Japan ATI alliances, and undermine Delta’s ability to compete in the U.S.
- Tokyo and U.S.
- Japan mar ketplace.Delta Reply Page 4 II. Delta’s Seattle - Haneda Service Proposal Will Maximize Public Benefits. A. Delta’s Seattle - Haneda Proposal Will Create Important Service Benefits for the Traveling Public Seattle is the largest U.S.
- Tokyo O&D gateway without Haneda service. D L
- R
- 101. In addition, the Seattle gateway competes with San Francisco and Los Angeles for U.S.
- Tokyo traffic and is disadvantaged in not being abl e to offer service to Haneda. DL
- R
- 212, 214, 410, 411. Delta, together with its partner, Alaska Airlines, will be able to offer convenient nonstop - to - nonstop Haneda service at Seattle to 42 connecting cities

– extending the benefits of Haneda service to the Pacific Northwest region and throughout the United S t ates. DL
- R
- 102, 103, 213, 410 . Delta has built a successful international gateway at Seattle and will succeed in the Haneda market as it has in other international markets. Seattle’s demographic and business metrics support the establishment of Haneda service at the Seattle gateway. Seattle ranks near t he top of 50 U.S. metropolitan areas in categories such as exports, growth, and household income. And, in 2011, two - way trade between the State of Washington and Japan surpassed $24 billion. (Answer of Seattle, p. 2). Yet, unlike the other major west co ast business centers of San Francisco and Los Angeles, Seattle does not have any service to Tokyo’s preferred downtown airport. DOT can best achieve the public interest objectives it seeks to attain in this proceeding by allowing Delta to offer Haneda s ervice at the Seattle gateway. This will enable Delta to better compete on the west coast with the services of the immunized alliance carriers. B. Delta’s Proposal Will Preserve 3 - Way Alliance Competition at Haneda and Enhance the Competitive Market Stru cture. When it first allocated the Haneda slots at issue, the Department did not weigh the impact that the pending United and American ATI applications would have on U.S.
- Haneda and U.S.
- Tokyo service and competition. (Order to Show Cause, 2010
- 5
- 7, pag e 8; FinalDelta Reply Page 5 Order 2010
- 7
- 2, page 6). However, now that United and American have been granted antitrust immunity with their Japanese partners, DOT has properly indicated that in considering Delta’s request to move its Haneda slots from Detroit to Seattle, D OT intends to consider the “overall competitive environment” and “market structure.” Order 2012
- 8
- 20, page 3. Permitting Delta to serve the Seattle gateway in competition with San Francisco and Los Angeles will satisfy the DOT’s competition and market st ructure objectives. The two immunized U.S.
- Japanese alliances have inherent advantages over Delta, which does not have a Japan alliance partner. As a SkyTeam member and major U.S.
- Japan competitor, Delta is the only carrier capable of offering a com petitive alternative to the west coast Haneda services of American/JAL at San Francisco and United/ANA at Los Angeles. The DOT has consistently sought to promote inter
- alliance competition. 2 By approving Delta’s request, the Department will achieve this objective

. III. Delta’s Seattle - Haneda Proposal M erits Priority Over the Competing Applications.
A. Reply to United. Delta’s proposal to provide Seattle with its first nonstop Haneda flight should be ranked above United’s proposal to add a second San Francisco service for the following
reasons:

• United operates a metal neutral joint venture with ANA, the largest hub operator at Haneda. A further award to United/Star would undermine alliance competition with Star and oneworld each having three Haneda f lights to Delta’s one
.

• San Francisco already has nonstop Haneda service (on JAL), and United and ANA have discretion under their metal
- neutral joint venture to add a second

2 See Order 2009
- 7
- 10, page 17 (“We also examined the changes in inter
- alliance competition.... The ability of the ‘non
- hub’ alliance members to compete at [a hub of another alliance] can benefit both bu siness and leisure passengers.” ); Order 2010
- 2
- 8, page 28 (“[E]n h anced inter
- alliance competition is beneficial for consumers across many markets....”)Delta Reply Page 6 daily flight if that is the best use of the slot pair for the alliance. San Franci sco should not receive a second Haneda flight at the expense of Seattle’s first nonstop service.

• United will rationalize San Francisco
- Narita service, canceling out the benefits of its proposed Haneda flight. United admits that it intends to operate “at l east one daily Tokyo Narita flight”

– whereas United currently operates two daily Tokyo Narita flights for seven months of the year. (UA app at n.4) By contrast, Delta’s daily full year
- round Seattle
- Narita service will be maintained and the new Haneda fl ight will produce true incremental benefits. In carrier selection cases, the Depar t ment has long emphasized the importance of

“ provid[ing] consumers with the special convenience of nonstop service in a market that does not receive it.” Order 98
- 12
- 33 at 7. Delta’s Seattle
- Haneda proposal would create this important new convenience, while United’s proposal would merely duplicate existing nonstop service on the San Francisco
- Haneda route. (1) Seattle is a strong and growing Delta international hub

. Uni ted attempts to denigrate Seattle as a “non
- hub” for Delta, and is dismissive of the extensive online network provided by the Delta/Alaska domestic codeshare alliance. United’s criticism is without merit and has been proven false by the marketplace

. DL
- R
- 202, 203. Seattle is a strong and growing international hub for Delta which currently supports nonstop service to Beijing, Osaka, Nar ita, Paris and Amsterdam. DL
- R
- 204 . Seattle is a cornerstone of Delta’s West Coast international route network and can r eadily support additional nonstop destinations, including Haneda. Delta has made major investments in facilities, aircraft, marketing and route development at the Seattle hub. Delta’s partnership with Alaska Airlines is a critical component of Delta’s Se attle hub, which supports the growth and expansion of Delta international service. As well put by Alaska in its Answer, the Delta/Alaska marketing alliance is a deep and longstanding partnership and is much more than a “vanilla codeshare agreement.” (pag e 3). Under the enhanced agreement signed in 2008, Alaska has committed to provide dedicatedDelta Reply Page 7 international feed to support Delta’s international flights. Already, more than 200,000 annual passengers connect from the DL*/Alaska codeshare network onto Del ta international flights, and that number continues to increase year after year. The combined Delta/Alaska network from Seattle provides a robust combination of nonstop and online connecting feed that is equivalent to the network United (and its connectio n carriers) operate at San Francisco. DL
R
- 202, 203

. United claims that its San Francisco hub is larger than Delta/Alaska at Seattle, but as proved by its own exhibits, the number of nonstop destinations is the same (70), and the number of wee kly flights is comparable. DL
- R
- 203 . More importantly, Seattle is the better and more effective gateway for Haneda connecting passengers. Delta will provide more new cities with first one stop Haneda service th an United (18 vs. 13). DL
- R
- 201 . Delta will better s erve the Pacific Northwest region, which has no non stop Haneda gateway today. DL
- R
- 212 . And, in almost all cases, service via Seattle is more direct and less circuitous than service over San Francisco. Id. (2) United and ANA are Immunized Joint Vent ure Partners

. To read United’s Answer one would think that United is alone in the marketplace and foreclosed from competing at Haneda. United ignores its metal neutral joint venture with ANA (DL
- R
- 205)
-- which makes Star the single largest competitor in the U.S.
- Japan marketplace and the largest hub operator at Haneda. DL
- R
- 105, 106. United ’s Answer makes the incongruous claim that it is “the only applicant that can bring new competition to Tokyo Haneda.” (page 1) United complains that it is “the onl y U.S. carrier serving Japan not permitted to operate at Haneda . . .” (page 7). However, United ignores the important benefits it has reaped from its alliance with ANA in the U.S.
- Japan and U.S.
- Haneda marketp l ace.Delta Reply Page 8 United emerged from the 2010 U.S.
- Jap an open skies talks as the most richly rewarded U.S. carrier

. United and Continental were each granted antitrust immunity with ANA

– the strongest and heal th iest Japanese carrier with the largest transpacific network and the biggest Haneda hub. That same year, United and Continental were granted permission to merge with each other, surpassing Delta to become the world’s largest carrier, and, together with ANA, became the larges t single competitor in the U.S.
- Tokyo market. Today, Star enjoys a 41 percent market share compared to 27 percent for Delta. DL
- R
- 106

. United codes hares on each and every one of ANA’s U.S.
- Japan flights, including ANA’s U.S.
- Haneda services. DL
- R
- 207

. And, under the revenue sharing joint venture which United and ANA have certifie d they have implemented, United has the opportunity to share in the benefits of Haneda through its metal neutral alliance

. DL
- R
- 205

. For Delta’s part, the 2010 o pen skies agreement produced two form idable consolidated competitors: Star and oneworld immun ized alliances
-- each with inherent advantages in terms of network scope and Haneda incumbency

. The only new competitive tools Delta was given to combat these challenges were its two limited Haneda slot pairs. United’s suggestion that these slots should be taken from Delta and given to United to “provide competitive parity among U.S. carriers at Haneda” (page 4) is incredulous. Delta would trade both of its Haneda slots for the advantage of antitrust immunity with a Japanese partner. Delta tried very hard to secure a Japanese partner, but was unsuccessful. While Delta accepts the challenge of being the lone independent network competitor in the U.S.
- Japan market, the Department should avoid further injury to Delta’s competitive position that would res ult from enriching the dominant Star ATI alliance at Delta’s expense . DL
- R
- 208

. United and ANA have the largest alliance and are the single biggest competitor in the U.S.
- Japan marketplace. W ithout that immunity, United and ANA would be each other’sDelta Reply Page 9 larg est competitors. As shown in the following table, United and ANA overlap on seven U.S.
- Tokyo nonstop routes: United ANA Los Angeles - Narita Los Angeles - Narita New York City - Narita New York City - Narita Honolulu - Narita Honolulu - Narita San Francis co - Narita San Francisco - Narita Seattle - Narita Seattle - Narita Chicago - Narita Chicago - Narita Washington D.C. - Narita Washington D.C. - Narita Houston - Narita (DL
- R
- 206). United claims that it would be a “new competitor” at Haneda, but “new competi tion” could also be created on each of the United/ANA nonstop overlap routes by removing the antitrust immunity that exists today. There is no reason competition at Haneda should be viewed differently from any other U.S.
- Japan route served by the antitrus t immunized United/ANA joint venture. United argued vigorously and the Department accepted that greater public benefits would be achieved through an immunized joint venture and “a truly metal neutral network”
-- In the current environment, the two sets of parties are unable to cooperate on fares , route coordination , and other business plans on a network
- wide basis because of the risk of a legal challenge. As such, the carriers are currently unable to implement many of the provisions that would deliver the most significant consumer benefits: joint pricing, joint scheduling , and network coordination

. . . . Absent the ability to share revenues and establish a truly metal
- neutral network , the alliances would also lack the commercial incentive to fully integra te their networks ." Japan ATI Show Cause Order 2010
- 10
- 4 at 15 (emphasis added)

. As correctly stated by the Department when it approved the United/ANA immunized alliance: "The intended commercial effects of the ATI Applicants’ respective joint business
a greements are similar to those resulting from a merger." Japan ATI Order 2010
- 10
- 4 at 5.Delta Reply Page 10 United cannot be a “new competitor” at Haneda because it has already been effectively merged with ANA for purposes of U.S.
- Japan service and competition.
United ca nnot have it both ways. Either United and ANA are competitively merged and commercially integrated members of the Star ATI alliance or United and ANA have failed to realize the claimed benefits of their ATI alliance and should no longer be entitled to the benefit of antitrust immunity. 3 The Depar t ment should carefully examine the contradictory positions taken by United in the Star ATI and Haneda route case proceedings. (3) Star has multiple options to fund San Francisco
- Haneda service and increase dire ct participation by United in the U.S.
- Japan market. United protests that Star cannot move its Los Angeles
- Haneda flight to San Francisco because it produces important consumer benefits in its own right. However, United ignores the fact that Star holds a second pair of Haneda slots which ANA uses to provide B767 service between Haneda and Honolulu. DL
- R
- 210. Like Hawaiian’s Haneda
Kona service to which United objects in this case, Haneda
- Honolulu serves almost exclusively Japanese tourists.
The United/ ANA joint venture made the commercial decision that Honolu lu
- Haneda is more important than San Francisco
- Haneda. This is understandable because Honolulu is a highly lucrative market for carriers, and less expensive to operate than long
- haul service to the Un ited States. Having made that judgment, however, Star should not receive a third slot pair for San Francisco leaving Delta with just one pair . DL
- R
- 208

. In the face of scarce Haneda resources, each alliance must make rational business choices on which r outes to

3 Delta is not questioning United’s claim to metal neutrality merely because United is an applicant in this proceeding. (UA Ans. At n.2) United has made meta l neutrality an issue because it claims to be a distinct U.S. flag competitor apart from its immunized alliance. American makes no such claim. American was awarded Haneda slots at a different point in time before immunity had been granted to Star and one world. In the current competitive environment, taking Haneda slots from Delta (with no Japan partner) and awarding them to United (with the largest immunized alliance) can hardly be seen as “equal treatment.”Delta Reply Page 11
serve
. While United and ANA are free to make those decisions at their own discretion, Delta must seek permission from the Department t o change gateways. United has provided insufficient basis to disturb the current equitable distribution of sl ots with Star and Delta holding two pairs each. While it is understandable that United and its pilots would like to increase U.S. carrier flying to Japan, it is not necessary for United to receive Haneda slots in order to do so. Under its metal neutral joint venture with Air France and KLM, Delta routinely switches operating carriers to balance commercial benefits and flying opportunities with its partner

. For example, Delta recently assumed flying for Air France on the Chicago
- Paris, Seattle
Paris and Philadelphia
- Paris routes. To the extent United does not think it is getting a fair share of U.S.
- Japan flying , that is a commercial discussion to be had with ANA that does not require the Department’s involvement or the award of additional Haneda slots. United does not need to fly its own aircraft to Haneda to enjoy the benefits of Haneda access though its revenue sharing joint venture. DL
- R
- 205
B. Reply to Hawaiian Delta’s proposal to provide the first Haneda service to Seattle and the Pacific Nor thwest region deserves priority over Hawaiia n ’s proposal to add a fourth Haneda
- Hawaii flight at Kona. DL
- R
- 301. 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 gra nted, 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 (D L
- R
- 305) , and the Tokyo
- Kona market is even more heavily Japan ese originating (97%). DL
- R
- 306

. It is not in the public interest to have so many limited entry opportunities concentrated in HawaiiDelta Reply Page 12 to the exclusion of service to U.S. citizens and U.S. busin esses seeking access to Tokyo’s preferred close
- in airport

. 4 Delta’s service proposal is superior to Hawaiian’s because:

• Seattle and the Pacific Northwest have no nonstop service to Haneda, whereas Hawaii has three daily Haneda flights. DL
- R
- 301.

• Seat tle nonstop service will benefit 114,000 nonstop Tokyo O&D pass engers vs. 80,000 at Kona. DL
- R
- 304

.

• Seattle service will benefit U.S. travelers while Kona service will benefit Japanese tourists . DL
- R
- 305, 306

.

• Kona does not have functional CBP/FIS facili ties, and there can be no certainty that these facilities will be available at Kona in the near future, if at all. DL
- R
- 310

.

• Delta’s proposal will preserve and enhance competition among the U.S.
- Japan network competitors at Haneda; Hawaiian’s proposal wou ld consume Haneda limited entry authority for a niche market that can readily be served using open skies rights. The Tokyo
- Kona route proposed by Hawaiian was previously operated by JAL for fourteen years from J une 1996 to October 2010. DL
- R
- 307 . Kona n o longer has a functional CPB/FIS inspection facility, and Hawaiian concedes that the timeline and ability to resume international service at Kona is uncertain in light of these constraints. (HA App. at n.2). Hawaiian does not need an award of Haneda slot s to reestablish Tokyo
- Kona service

. The United States secured an open skies agreement with Japan, with the limited exception of Haneda. The open skies agreement includes Tokyo Narita, which is far and away the larges t Japanese gateway to Hawaii. Yet, H awaiian fails to offer any competitive service from Tokyo Narita. Instead, Hawaiian seeks out protected niche markets (such as

4 In past carrier selection cases the DOT ha s held that reliance on foreign originating traffic is of secondary importance to a carrier /gateway proposal that provides greater benefits to the U.S. traveling public. See, U.S.
- Japan Gateway Order , Docket 43575, page 60. In that proceeding the DOT sel ected Delta to serve Portland
- Tokyo over a Hawaiian Airlines proposal to serve Honolulu
- Nagoya. This longstanding precedent favor s the selection of Delta’s Seattle
- Haneda proposal over Hawaiian’s Kona
- Haneda proposal here

.Delta Reply Page 13 Haneda), and secondary cities such as Sappor o, Fukuoka, and Osaka. DL
- R
- 308

. Hawaiian boasts that it has opened three new Japa n gateways in the last two years. But all of Hawaiian’s new gateways combined generate fewer passengers than Narita, which H awaiian conspicuously avoids. Id. If Hawaiian wishes to initiate Tokyo
- Kona service, i t is free to do so at Narita. Hawaiian doe s not need a further allocation of limited entry Haneda slots to provide this service. As detailed in Hawaiian’s application, it has implemented a broad expansion strategy in the Hawaiian
- Japa n and Hawaii
- Asia markets. While the Department may have been justified in providing Hawaiian preferential new entrant treatment in 2010, by its own account Hawaiian is now an established and successful incumbent. Hawaiian should be expected to take advantage of the Tokyo Narita open skies opportunities available to it today. W hile Haneda
- Hawaii service is an attractive commercial proposition for carriers, 5 it is not necessarily in the public interest to have so many limited entry opportunities concentrated in a single state. Hawaii receives three Haneda flights t oday, and a grant of Hawaiian’s application would result in half of all bilaterally authorized slots bei ng concentrated in Hawaii. DL
- R
- 301 . Haneda
- Hawaii flights are used almost exclusively by Japanese leisure passenger s and do not produce benefits for the U.S. traveling public. DL
R
- 305, 306

. (1) Seattle
- Haneda can readily support nonstop service

. Contrary to Hawaiian’s suggestion, Seattle can readily support nonstop Haneda service. Seattle is the largest U.S. gateway without Haneda access, and is subst antially larger than Hawaiian’s proposed Kona gateway (114,000 vs. 80,000 annual passengers)

.

5 Delta would welcome the oppor tunity to provide Haneda
- Honolulu service. Delta is the only Tokyo
- Honolulu competitor that does not have the ability to provide service from Haneda, placing Delta at a competitive disadvantage to Hawaiian, Star, and oneworld. Delta requested, but did n ot receive Haneda
- Honolulu slots in the 2010 proceeding.Delta Reply Page 14 DL
- R
- 304

. In fact, despite being a larger local market to Tokyo than Chicago, Seattle has fewer fl ights and fewer seats. DL
- R
- 302

. Delta’s Seattle
- Haneda prop osal represents much more than just an incremental Tokyo flight at Seattle. Haneda is a unique new product in a new time channel that will drive increased d emand for this service. DL
- R
- 303 . Haneda is the preferred airport for business passenger s based o n its proximity to downtown Tokyo. Delta’s schedule is well timed to capture business demand, with an evening westbound departure from Seattle and a midnight east bound return from Haneda. DL
- 101 . These flights provide good connections to the Delta/ Alask a connecting network in a distinct new time channel for the scores of online connecting cities that will gain improved access to Haneda. DL
- R
- 303

. C. Reply to American American’s proposal to add a third Los Angeles
- Haneda flight would create the fewest service benefits and is least desirable from an alliance competition standpoint. Delta’s Seattle proposal would open a new U.S. gateway to Haneda and provide 18 communities with their first one
- stop service to Haneda , versus only 5 for American . DL
- R
4 01

. Oneworld already holds three U.S.
- Haneda slots pairs

– more than any other U.S.
- Japan competitor. Los Angeles has two daily nonstop Haneda flights, and American/JAL have the option to add a third Los Angeles service under their metal neutral joint venture. DL
- R
- 403, 407. An award to American would undermine the competitive distribution of Haneda slots, with oneworld holding four opportunities, St ar two, and Delta one. DL
- R
- 405

. American has already rationalized its JFK
- Narita flight (with Ameri can flying JFK
Haneda and JAL flying JFK
- Narita). And, American is reducing Los Angeles
- Narita from daily to 5 weekly in early 2013. Should American receive additional Haneda slots, theDelta Reply Page 15 Department can expect American to fully rationalize its Los Angeles
- Narita flight, as it did at JFK, thereby canceling out the limited benefit s of its Haneda proposal. DL
- R
- 408

. Finally, c ontrary to American’s claim, Seattle is the largest U.S.
- Tokyo gateway
w ithout Haneda service. DL
- R
- 404 . This was the case when Del ta filed its initial exhibits, and current MIDT data places Seattle even further ahead of the next
- largest gateway (Chicago), and Las Vegas (which is not a Tokyo gateway). Id.
IV . Conclusion Delta’s request to establish Haneda service at the Seattle gat eway will improve Delta’s utilization of its Haneda slots, enhance consumer benefits, and promote competition on U.S.
- Haneda routes. The competing applications of United, American and Hawaiian would produce fewer benefits and undermine competition and m arket structure objectives the Department seeks to achieve. For these reasons, we respectfully urge that Delta’s motion for flexibility to use its Haneda slots at the Seattle gateway be granted.

Respectfully submitted,

_______________________________ __ Alexander Van der Bellen Managing Director, Government Affairs

& Associate General Counsel DELTA AIR LINES, INC.C ERTIFICATE OF SERVICE A copy of the foregoing Reply has been ser ved this 13th day of September, 2012 , upon the following persons via email: Francis.Heil@aa.com Robert.Wirick@aa.com dan.weiss@united.com thomas.bolling@united.com lhalloway@crowell.com gmurphy@crowell.com howard.kass@usairways. com benjamin.slocum@usairways.com jhill@dowlohnes.com paul.gretch@dot.gov keith.glatz@dot.gov esta.rosenberg@dot.gov brett.k ruger@dot.gov todd.homan@dot.gov urskr@state.gov eugene_alford@ita.doc.gov info@airlineinfo.com Tim.OMalley@alpa.org Ishiwata.K@port seattle.org Safora.I@portseattle.org Kyle.Levine@alaskaair.com Megan.Lawrence@alaskaair.com

# Delta Reply Exhibits

Section I: Delta’s Seattle - Haneda Service Proposal Will Maximize Service and Competitive Benefits Section II: Reply to United Airlines Section III: Reply to Hawaiian Airlines Section IV: Reply to American Airlines

# Section I: Delta’s Seattle - Haneda Service Proposal Will Maximize Service and Competitive Benefits

# Seattle is the Largest US Mainland - Tokyo Gateway Without Haneda Service

• With HND service now established at LAX (x2) and SFO, SEA is the largest West Coast
- Tokyo gateway without Haneda service

481,791 293,257 246,782 84,359 37,707 LAX JFK SFO SEA DTW US48 - Tokyo Annual Passengers YE July 2012
HND Service No HND Service Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 101 Page 1 of 1

Source : MIDT Note: Delta estimates SEA
- TYO true market size to be approximately 35% higher (114,000) due to sales not captured via MIDT (dire ct bookings, data from non
- participating GDS’s).

# Seattle is an Ideal West Coast Gateway to Haneda Delta and Alaska Provide Nonstop Service to 62 U.S. Points

Note: Includes service operated by Alaska/Horizon Source: August 2012 schedules, Diio Mi Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 102 Page 1 of 1

To ANC, FAI, JNU, SIT, KTN 

### Haneda

# Seattle is Geographically Positioned to Optimally Connect U.S. Traffic to Haneda

• Seattle connections are less circuitous versus other West Coast gateways for points across the US

— including the Pacific Northwest, the Southeast and the East Coast

SEA is a more direct route to HND for the most US cities



## SEA

SFO Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 103 Page 1 of 1

# Two Delta US - Haneda Routes are Required to Maintain Competitive Balance

• The DOT’s instituting order in this proceeding emphasizes competition and market structure benefits

• Today US
- HND capacity is balanced between the three major alliance groupings

3

2 2

oneworld

AA/JL Skyteam DL Star NH/UA US - Haneda Slot Pairs by Alliance Group Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 104 Page 1 of 1



### HNL 777 JFK 777 SFO 777 HNL 767 LAX 777 LAX 332 SEA 767

### All Nippon Airways, 43%

Japan Airlines, 35%

Other Japanese

Airlines, 17% All Non - Japanese Airlines, 5% 

# Japanese Carriers Control 95% of Haneda Slots

Source: Counts based on August 2012 scheduled passenger operations. Does not include non
- scheduled or cargo operations. 

### 524 daily operations

58 daily operations Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 105 Page 1 of 1



### 422 daily operations

214 daily operations

# Delta Provides the Only Broad - based US - Tokyo Alliance Competition to Star and oneworld

Source: August 2012 OAG schedules 

### Delta 27% United/ANA 41%

American/JAL 24% Foreign Flags 8% U.S. Mainland - Tokyo Transpacific Seat Share



# Delta Does Not Have a Japanese Carrier Partner Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 106 Page 1 of 1

# Section II: Reply to United Airlines

# Delta Will Provide More Western Communities With First One - Stop Haneda Service Than United Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 201 Page 1 of 1

Carrier First - Time HND Service to Western Communities United 13* Delta/Alaska 18 ANC JNU KTN

* United erroneously counts Sacramento as one of 14 new West Coast service points; Delta currently serves Sacramento
- Haneda via Los Angeles. UA SFO Connections DL SEA Connections Source: Aug 2012 OAG

# Delta’s Seattle Hub Balances Alaska Airlines Feed with a Strong Local Market and Significant Own - Metal Connectivity

26% 40% 64% 36% 42% 10% 38% 18% 27%

KIXSEA PEKSEA NRTSEA Traffic Composition of Delta’s SEA - Asia Flights MIDT, YE August 2012

SEA Local DL Connected AS Connected Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 202 Page 1 of 1

# As United’s Own Exhibits Prove, Delta’s SEA Hub Serves The Same Number of Domestic Destinations With A Comparable Number of Flights vs. United’s San Francisco Hub Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 203 Page 1 of 1

# Seattle is a Successful Delta Long - Haul International Gateway

• Seattle is a major Asia gateway and is the 5 th 

## largest Asia market in the US

• Delta has a leading international presence in Seattle and currently serves three non - stop destinations in Asia and two in Europe

Delta Market Served Since

SEA - NRT Pre - 1989 SEA - AMS 1998 SEA - KIX 2010 SEA - PEK 2010 SEA - CDG 2012 * 

## SEA AMS CDG KIX PEK
NRT Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 204 Page 1 of 1

* DL replaced AF in April 2012; AF
operated since 2007

# United and ANA Have Certified to the DOT That They Have Implemented a Metal Neutral Joint Venture Alliance Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 205 Page 1 of 1

# United and ANA Overlap on Seven US - Tokyo Nonstop Routes Where Competition Between the Carriers Has Been Eliminated by the Grant of ATI Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 206 Page 1 of 1



### United/ANA USA - Narita Service United Flight ANA Flight Los Angeles - Narita Los Angeles - Narita New York City - Narita New York City - Narita Honolulu - Narita Honolulu - Narita San Francisco - Narita San Francisco - Narita Seattle - Narita Seattle - Narita Chicago - Narita Chicago - Narita Washington D.C. - Narita Washington D.C. - Narita Houston - Narita

# United Codeshares on All of ANA’s US - Japan Flights, Including US - Haneda Flights Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 207 Page 1 of 1



### ANA USA - Japan Service ANA Flight United Codeshare? Los Angeles - Narita YES New York City - Narita YES Honolulu - Narita YES San Francisco - Narita YES Seattle - Narita YES Chicago - Narita YES Washington D.C. - Narita YES

Los Angeles - Haneda YES

Honolulu - Haneda YES

# An Award to United Results in a Less Competitive Distribution of Slots among the Alliances and Undermines the Competitive Market Structure at Haneda Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 208 Page 1 of 1



### 3 3

1

oneworld Star Delta US - Haneda Slot Pairs by Alliance Group

HNL 777 JFK 777 SFO 777 SFO 777 HNL 767 LAX 777 LAX 332 SEA 767

# United Ignores its ATI Partnership with ANA and the Metal - Neutral Benefits Claimed to Justify Immunity

“United’s proposed San Francisco
- Haneda flights will enable it to provide U.S.
- Tokyo Haneda service through its San Francisco hub with its own U.S. aircraft and crews”

— Application of United Airlines Inc, DOT
- OST
- 2010
- 0018

“The Pacific JV will foster “metal neutrality”

– a commercial environment in which joint venture partners share common economic incentives to promote the interests of their alliance over their individual corporate interests.” “...the Joint Applicants will harmonize their joint network and become indifferent as to which partner collects the revenues and operates the aircraft on a given itinerary .”

— United/ANA ATI Application, DOT
- OST
- 2009
- 0350 Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 209 Page 1 of 1

# United Ignores its ATI Partner ANA Which Could Operate SFOHND Today

• Any of ANA’s current Haneda frequencies can be used to serve San Francisco under the metal neutral ATI with United

Origin Destination Operating Carrier Alliance Equipment Eligible for SFO move HND LAX NH UA/NH 777 YES HND HNL NH UA/NH 767 YES Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 210 Page 1 of 1

# Delta’s Seattle - Haneda Proposal Will Add More Than Twice as Many Flights and Seats to the Marketplace than United

• United admits it intends to operate “at least one daily Tokyo Narita flight”

– whereas United currently operates two daily Tokyo Narita flights for seven months of the year

• Delta’s daily year
- round Seattle
- Narita service will be maintained and the new Haneda flight will produce true incremental benefits

163,520

81,238 730
302

Delta SEA United SFO Annual Incremental Seats and Flights in West Coast - Tokyo Markets

Seats Flights Seats Flights Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 211 Page 1 of 1

# Passengers Throughout the West Coast Can Conveniently Travel via Seattle – But Pacific Northwest Passengers are Inconvenienced by Travel via SFO

SEA

SFO Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 212 Page 1 of 1

SFO - HND SEA - HND Nonstop Mileage 5,160 4,803
SFO - SEA - HND SEA - SFO - HND Combined Connecting Segment Mileage 5,482 5,839 Circuity (%) 6% 22% Circuity (Miles

Roundtrip) 644 2,072 The Pacific Northwest and Alaska are more direct to HND via SEA

# Delta and United Provide a Similar Number of Round - Trip Connections, but Delta will Better Serve the Pacific Northwest Region

UA SFO Connections DL SEA Connections To ANC, JNU, KTN

Carrier Total N. Am. RT Connections East Coast RT Connections West Coast RT Connections Pacific NW RT Connections United 36 8 28 9 Delta/Alaska 32 3 29 18 *Pacific Northwest defined as Washington, Oregon, Montana, Idaho, Alaska and Western Canada; West Coast defined as West of Te xas
. Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 213 Page 1 of 1

# San Francisco Already Has Nonstop Haneda Service While Seattle Has None

2

1

0 LAXHND SFOHND SEAHND US West Coast – Haneda Flights by Gateway Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 214 Page 1 of 1

# Section III: Reply to Hawaiian Airlines

# Current Distribution of HND Slots Is Concentrated In Hawaii, While The Pacific Northwest Has No Service Today Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 301 Page 1 of 1



### 3

2

1 1

0 HNL LAX SFO JFK SEA Daily HND Frequencies December 2012

# Seattle - Tokyo Can Readily Support New Haneda Service

• Seattle demand for TYO traffic is greater than Chicago demand

• Chicago currently has more weekly frequencies and seats

• ORD currently has 45% more weekly seats to TYO than SEA

• SEAHND will be a unique product in a new time channel (DL
- R
- 303)

Sources: Demand data is from MIDT, YE Aug 2012; Weekly frequencies are from OAG, reflecting August 2012 schedule 

### ORD SEA Demand (market size in annual MIDT bookings) 83,347 91,165 Tokyo round
- trip weekly frequencies 28 21 Weekly seats 7,770 5,369 Demand and Seat Capacity Comparison: ORD and SEA Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 302 Page 1 of 1

# SEAHND is a Unique Product in a New Time Channel Driving New Market Demand

• SEAHND will offer a second Tokyo time channel for both local Seattle and connecting passengers

• Time channel uniqueness, coupled with airport preference, will allow Delta to stimulate true incremental demand to support SEAHND Inbound SEA Time Outbound 05:00 06:00 07:00 08:00 09:00

Eastbound NRT - SEA - USA Connections Westbound USA - SEA - NRT Connections 10:00 11:00 12:00 13:00 14:00 15:00

Westbound USA - SEA - HND Connections 16:00 17:00

Eastbound HND - SEA - USA Connections 18:00 19:00 20:00 21:00 22:00 23:00 SEA - HND HND - SEA NRT - SEA

SEA - NRT Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 303 Page 1 of 1

# Seattle - Tokyo Is 43% Larger Than Kona - Tokyo Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 304 Page 1 of 1



### 84,359 58,944 29,526 20,630

SEATYO KOATYO Adjusted MIDT Passengers YE July 2012

Note: Delta estimates true market size to be approximately 35% higher due to sales not captured via MIDT (direct bookings, da ta from non
participating GDS’s). 

### ~114,000
~80,000

MIDT True - Up

# In the Tokyo - Hawaii Market, 95% of Traffic Originates in Japan Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 305 Page 1 of 1

Source : MIDT, YE Aug 2012 

### Japan, 95%

US, 5%

# In the Tokyo - Kona Market, 97% of Traffic Originates in Japan Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 306 Page 1 of 1

Source : MIDT, YE Aug 2012 

### Japan, 97%

US, 3%

# JAL Served Tokyo - Kona For More Than 14 Years From Narita; Open Skies Opportunities Are Available to Hawaiian to Resume Service On The Route

93 217 366 360 357 351 359

293 364 364 359 363 357 359
301

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 JL/JO Annual NRT - KOA Departures

Source : DOT, T
- 100 Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 307 Page 1 of 1

# Hawaiian Can Fly Additional Hawaii - Tokyo Service Today But Chooses Not To Do So Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 308 Page 1 of 1



## • Hawaiian avoids service at Tokyo Narita

– the largest Japanese gateway to Hawaii

• Hawaiian selects markets where there is less competition

– including HND and secondary Japan cities outside of Tokyo

0 7 7 7 3 0 58

14 14 7 0 0 NRTHNL HNDHNL KIXHNL FUKHNL CTSHNL NRTKOA Hawaiian and Competitor Weekly Japan Frequencies (Dec 2012 schedule)

Hawaiian Competitors

# Narita - Honolulu Is 46 Times Larger than Haneda - Kona Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 309 Page 1 of 1



### 878,180

346,115

39,639 19,305 NRTHNL HNDHNL NRTKOA HNDKOA TYO - Hawaii MIDT Passengers for YE July 2012

Source : MIDT 

## • Hawaiian avoids Open Skies competition at Narita and seeks a protected limited entry advantage at H aneda

# Hawaiian’s Application Depends on the Uncertain Ability to Add FIS Capabilities in Kona Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 310 Page 1 of 1



## “The initiation of Hawaiian’s service from Haneda to Kona may require updates to CBP/FIS facilities at K ona International Airport . Hawaiian already has reached out to the appropriate state and local officials to address this potential issue so that the facility satisfies current Department of Homeland Security standards in time for Hawaiian’s proposed start date for Kona
- Haneda.”

-- DOT
- OST
- 2010
- 0018 2012 Application of Hawaiian Airlines, Inc. p.4 footnote 2

# Seattle - Haneda Will Benefit US Travelers Whereas Kona Haneda Will Benefit Japanese Tourists

33,132

1,484

SEA KOA

US Point - of - Sale Passengers Between the US and Tokyo Year Ended July 2012

Source : MIDT Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 311 Page 1 of 1

# Hawaiian’s Kona Proposal Would Benefit A Small Segment Of The US Population, While Delta’s Seattle Proposal Will Benefit Almost The Entire US Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 312 Page 1 of 1



## • Kona service would benefit only Hawaii, which enjoys plentiful existing Haneda service

• Seatt le service would benefit 49 of 50 US states by way of the connections Delta and Alaska Airlines provide via Seattle

307,385,237

1,360,301 185,079 US49 State of Hawaii Island of Hawaii US Census Population Data for 2010Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 313 Page 1 of 1 

# Pacific Northwest Passengers Are More Inconvenienced By Lack Of Non - Stop Seattle - Haneda Service Than Kona - Haneda Passengers Are By Lack Of Kona - Haneda Service

• KOA
- HND via HNL is only 0.1% more circuitous than KOA
- HND nonstop service

• SEA
- HND via LAX is 34% more circuitous than SEA
- HND nonstop service

• SEA
- HND via SFO is 22% more circuitous than SEA
- HND nonstop service

SEA - HND KOA - HND Nonstop Mileage 4,803 4,013
SEA - LAX - HND SEA - SFO - HND KOA - HNL - HND Combined Connecting Segment Mileage 6,441 5,839 4,017 Circuity (%) 34% 22% 0.1% Circuity (Miles

Roundtrip) 3,276 2,072 8

# Section IV: Reply to American Airlines

# Delta Will Provide More Western Communities With First One - Stop Haneda Service Than American Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 401 Page 1 of 1

Carrier First - Time HND Service to Western Communities American 5 Delta/Alaska 18 ANC JNU KTN

ANC

AA LAX Connections DL SEA Connections Source: Aug 2012 OAG

# Delta’s Seattle Hub Balances Alaska Airlines Feed with a Strong Local Market and Significant Own - Metal Connectivity

26% 40% 64% 36% 42% 10% 38% 18% 27%

KIXSEA PEKSEA NRTSEA Traffic Composition of Delta’s SEA - Asia Flights MIDT, YE August 2012

SEA Local DL Connected AS Connected Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 402 Page 1 of 1

# American and JAL Have Certified to the DOT That They Have Implemented a Metal Neutral Joint Venture Alliance Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 403 Page 1 of 1

# Contrary to American’s claims, Seattle is the Largest US Mainland - Tokyo Gateway Without Haneda Service

• SEA has been the largest existing US
- Tokyo gateway without non
- stop Haneda service, and more recent MIDT data shows that it is larger than ever before

• LAS is not a US
- TYO gateway; it is served exclusively as a behind gateway point

• Delta’s SEA market size figures are not erroneous as AA suggests in their answer (AA
- R
- 104)

• Slight differences across carriers’ MIDT statistics can be attributed to different data vendors

Delta estimates SEA
- TYO true market size to be approximately 35% higher (114,000) due to sales not captured via MIDT (direct boo kings, data from non
- participating GDS’s). Rank City Pax NRT Service? HND Service?

1 LAX 488,583 YES YES 2 JFK 294,248 YES YES 3 SFO 252,834 YES YES 4 SEA 91,165 YES NO 5 LAS 90,575 NO NO 6 ORD 83,347 YES NO 7 BOS 66,243 YES NO 8 IAD 63,639 YES NO 9 EWR 51,689 YES NO 10 MCO 50,869 NO NO 

### US48 - Tokyo Annual Passengers MIDT, YE August 2012 Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 404 Page 1 of 1Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 405 Page 1 of 1 

# An Award to American Results in a Less Competitive Distribution of Slots among the Alliances and Undermines the Competitive Market Structure at Haneda

LAX 777 HNL 777 JFK 777 SFO 777 HNL 767 LAX 777 LAX 332 SEA 767 4

2

1

oneworld Star Delta US - Haneda Slot Pairs by Alliance GroupDocket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 406 Page 1 of 1



## “Only the closer cooperation made possible through a joint venture based on metal neutrality

– or indifference as to which airline actually carries a customer

– will maximize the consumer benefits that immunized alliances make possible.” “By providing for the broad sharing of revenue on a metal neutral foundation, the JBA will ensure that American and JAL act for the benefit of

– and are compensated for their contribution to

– the alliance as a whole.”

--- American/JAL ATI Application ,DOT
- OST
- 2010
- 0034 (12Feb2010) 

# American Ignores its ATI Partnership with JAL and the Metal - Neutral Benefits Claimed to Justify Immunity

“Delta’s Detroit
- Haneda authority should be reallocated to American Airlines to operate service between Los Angeles and Haneda.” “Global alliance competition between Los Angeles and Haneda is limited to Star and SkyTeam . There is no Los Angeles
- Haneda nonstop service operated or marketed by oneworld .”

--- Application of American Airlines Inc. ,DOT
- OST
- 2010
- 0018 (27Aug2012 )Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 407 Page 1 of 1



## • Any of JAL’s current Haneda frequencies can be reallocated to serve Los Angeles under the metal neutral ATI joint venture with American

Origin Destination Operating Carrier Alliance Equipment Eligible for LAX move HND SFO JL AA/JL 777 YES HND HNL JL AA/JL 777 YES HND JFK AA AA/JL 777 NO 

# American’s Proposal Ignores its ATI Partner JAL, Which Could Operate LAXHND Today

# Delta’s Proposal Would Introduce Incremental West Coast Capacity While American’s Proposal Would Not Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 408 Page 1 of 1



## • Delta’s daily year
- round Seattle
- Narita service will be maintained and the new Haneda flight will produce true incremental benefits

• American will rationalize their LAXNRT frequency in favor of LAXHND

• American has completely canceled JFK
- NRT and relinquished this market to JAL

• American is already reducing LAX
- NRT this winter (7x to 5x weekly in January 2013)

163,520

0 730

0
Delta SEA American LAX Annual Incremental Seats and Flights in West Coast - Tokyo Markets

Seats Flights Seats FlightsDocket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 409 Page 1 of 1 

# Passengers Throughout the West Coast Can Conveniently Travel via Seattle – But Pacific Northwest Passengers Are Inconvenienced By Travel Via LAX

SEA

LAX The Pacific Northwest and Alaska

are more direct to HND via SEA

LAX - HND SEA - HND Nonstop Mileage 5,487 4,803

LAX - SEA - HND SEA - LAX - HND Combined Connecting Segment Mileage 5,757 6,441 Circuity (%) 5% 34% Circuity (Miles

Roundtrip) 540 3,276

# Delta’s Seattle Proposal Provides More Unique Roundtrip Connections and Better Service to the Pacific Northwest than AA’s Los Angeles Proposal Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 410 Page 1 of 1

DL SEAHND AA LAXHND R/T connection cities without direct TYO service 25 14

R/T connection cities with direct TYO service 7 10 Total 32 24

Unique US Roundtrip Connection Cities Based on Summer 2012 IATA Schedules

AA LAX Connections DL SEA Connections To ANC, JNU, KTN

To ANC

# Los Angeles Already Has Nonstop Haneda Service While Seattle Has None Docket DOT
- OST
- 2010
- 0018 Exhibit DL
- R
- 411 Page 1 of 1



### 2

1

0 LAXHND SFOHND SEAHND US West Coast – Haneda Flights by Gateway