Order 2014-12-9

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

 Issued by the Department of Transportation

 on the 15th day of December, 2014

 

 Served: December 15, 2014

 

 

ORDER INSTITUTING PROCEEDING AND INVITING APPLICATIONS

Summary

By this order, the Department institutes a proceeding to determine the disposition of the U.S.-

Haneda slot pair currently allocated to Delta Air Lines, Inc. (Delta) for services between Seattle, 

Washington, and Tokyo’s Haneda Airport.

Background

Under the Memorandum of Understanding between the United States and Japan signed on 

October 25, 2010, four daily slot pairs are available to carriers from each country to provide 

scheduled combination services between the United States and Tokyo’s Haneda Airport.1

 As a 

result of three prior proceedings, by Orders 2010-7-2, 2013-2-4, and 2014-4-6, the Department

has now allocated the four slot pairs as follows: 1) one slot pair to Hawaiian Airlines, Inc. 

(Hawaiian) for Honolulu-Haneda service; 2) two slot pairs to Delta, one for Los Angeles-Haneda 

 1 The scheduled operations are subject to the following conditions: 1) U.S. operations at Haneda are 

permitted between 2200 and 0700 hours local time; 2) departures from Haneda to a point in the 48 

contiguous U.S. states are not permitted prior to midnight; and 3) extra sections are not permitted.

Motion and application of 

AMERICAN AIRLINES, INC.; and

Motion of

HAWAIIAN AIRLINES, INC.

in the matter of the 2010 U.S.-Haneda 

Combination Services Allocation Proceeding

 Docket DOT-OST-2010-0018
2

and one for Seattle-Haneda services; and 3) one slot pair to United Airlines, Inc. (United) for San 

Francisco-Haneda service.2

Motion and Application of American

On October 2, 2014, American Airlines, Inc. (American) filed (1) a motion requesting that the 

Department withdraw Delta’s daily U.S.-Haneda slot pair that was awarded for Seattle-Haneda 

services; and (2) an application for reallocation of that slot pair to American for Los AngelesHaneda services. 

American points out that Delta intends to operate limited winter season service in the SeattleHaneda market, with only 17 planned operations over a 182 day period.3 American asserts that 

Delta plans to serve the market for one week every 90 days, which is just enough to prevent the 

slot pair from automatically reverting to the Department based on the dormancy condition 

imposed by the Department on the slot pair.4 

In support of its motion, American states that in 2012 Delta, “having over-promised the 

Department of the consumer benefits it would deliver with a daily Detroit-Haneda service,”5

asked for a second chance by proposing to move the service to Seattle.6 American notes that it

and others voiced concerns, at that time, that Seattle was the smallest market proposed in the 

proceeding and questioned the viability of the service. American points out that Delta promised 

the Department significant competition and transportation benefits, and that the Department, 

relying on Delta’s submissions, allowed the Detroit gateway to be moved to Seattle. American 

contends that “Delta has again failed in its promises by operating only a seasonal service in the 

Seattle-Haneda market,”7 and that its Seattle-Haneda slot pair should be reallocated.8

American urges the Department to restore the public benefits of Haneda service for which the 

U.S. Government negotiated. American argues that it would make better use of the opportunity 

than Delta by offering daily, year-round service to Haneda from its Los Angeles hub, and states 

that it is prepared to begin service in the Los Angeles-Haneda market on January 15, 2015, using 

 2 Following a carrier route selection proceeding, the Department initially allocated the four U.S.-Haneda 

slot pairs as follows: Delta at Detroit, Delta at Los Angeles, Hawaiian at Honolulu, and American at New 

York (JFK). See Order 2010-7-2. In 2012, Delta applied to relocate its Detroit-Haneda service to the 

Seattle-Haneda market. Following a second carrier selection proceeding, in which competing proposals 

were submitted by American, Hawaiian, and United, the Department awarded Delta authority to provide 

service between Seattle and Haneda. See Order 2013-2-4. Subsequently, in 2013, American ended its 

New York-Haneda service, and returned the slot pair to the Department for reallocation. Following a 

carrier selection proceeding involving United and Hawaiian, the Department selected United for Haneda 

service from San Francisco. See Order 2014-4-6.

3 American Motion and Application, at 3.

4 The allocation of the U.S.-Haneda slot pair to Delta is subject to the Department’s standard condition 

pertaining to dormancy, whereby the slot pair will be deemed dormant and will revert automatically to the 

Department if it is not used for a period of 90 days. See Order 2013-2-4, at 5.

5 American Motion and Application, at 4.

6 Id. 7 Id. 8 Id.
3

B-777 aircraft.9 American states that, as a new entrant into Haneda, it would provide important 

competition benefits, not only by competing head-to-head with Los Angeles-Haneda incumbents 

Delta and All Nippon Airways (ANA), but by also enhancing overall competition in the U.S.-

Tokyo market, as Los Angeles is the largest continental U.S. gateway to Tokyo. It asserts that 

the demand in the Los Angeles-Tokyo market is robust enough that six carriers today operate 

Los Angeles-Narita flights, and a new U.S. entrant into Haneda will provide important 

competition in the Tokyo market.

Motion and Answer of Hawaiian 

On October 9, 2014, Hawaiian filed a motion to reopen Order 2013-2-4, and an answer to the 

motion and application of American. Hawaiian specifically requests that the Department 

(1) reopen the case where Delta was awarded Seattle-Haneda authority and modify the dormancy 

condition to require meaningful year-round service; (2) grant American’s motion to withdraw the 

Seattle-Haneda slot pair from Delta; and (3) institute a new proceeding to develop a factual 

record before reallocating the slot pair.

Hawaiian also opposes American’s Los Angeles-Haneda application and states that, if the 

Department were to institute a proceeding to reallocate the slot pair, Hawaiian would apply to 

provide year-round service to Haneda with full utilization of the slot pair.

Hawaiian also argues that when Delta requested a transfer of its Detroit-Haneda slot to Seattle in 

2012, Hawaiian and others pointed out that Seattle was the smallest market proposed in the 

proceeding and warned that it would not succeed. Hawaiian notes that Delta’s approach is in 

contrast to American’s decision to return its Haneda frequency to the Department for reallocation 

once American concluded that continued operations from New York were uneconomic.10

Hawaiian states that by reducing its service to the minimum level to avoid the impact of the 

dormancy condition, Delta’s unilateral action violates the spirit, if not the letter, of Order 2013-

2-4, and the Department should award this opportunity to a carrier, such as Hawaiian, that will 

use it. Hawaiian argues that Delta’s Haneda strategy is not about providing service or 

competition, but “playing keep away” with valuable air service rights – all to protect Delta’s

Narita hub.11

Responsive Pleadings

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

MEC), and the Port of Seattle each filed answers in opposition to the motions of American and 

Hawaiian. American subsequently filed an answer and reply to the motion and answer of 

Hawaiian and a reply to the answer of Delta. Hawaiian then filed a sur-reply to American.12

 9 American Motion and Application, at 5.

10 Hawaiian Motion and Answer, at 1-3.

11 Hawaiian Motion and Answer, at 3.

12 Hawaiian’s response was accompanied by a motion for leave to file an otherwise unauthorized 

document. The Department will grant the motion.
4

Delta argues that it is operating in full compliance with the Department’s conditions concerning 

its Haneda authority. Delta states that it is using its Seattle-Haneda slot pair at least every 90 

days; that the slot pair is not dormant by definition, and, therefore, is “not subject to arbitrary 

withdrawal.”13 Delta states that, due to low forecast demand this winter and the not-yet-mature 

Seattle hub, it was commercially necessary to make seasonal reductions this winter. Delta 

contends that the Department has never stripped limited entry frequencies from a bona fide

holder due to a temporary reduction over a single traffic season. 

Delta asserts that it has firm plans to resume its Seattle-Haneda service on March 29, 2015. 

Delta further asserts that the public interest case for Seattle-Haneda authority is even stronger 

today than when the Department originally allowed Delta to move its Haneda gateway from 

Detroit to Seattle. Delta argues that the Department’s 2013 decision remains correct and that 

there is no reason to revisit that case. Delta states that it is working hard to make its SeattleHaneda service a permanent, year-round success, and that by the start of the next winter season 

Delta will have the support of 35 additional Delta/Delta Connection flights providing feed into 

its Seattle hub.14

Delta questions American’s attempt to seek Haneda access, because American recently

relinquished its New York/JFK-Haneda route, and did not at that time seek Los Angeles 

authority instead. Delta asserts that American could have reapplied for its own relinquished 

Haneda slot pair just a few months ago, and that American enjoys the benefit of two U.S.-

Haneda slot pairs through its joint venture with Japan Airlines (JAL).15 

With respect to Hawaiian, Delta notes that the Department has three times rejected Hawaiian’s

bid to add a fourth daily Hawaii-Haneda flight on top of the existing three flights operated by 

Hawaiian itself, JAL, and ANA. Delta argues that Seattle, in contrast, is the only Haneda 

gateway in the Pacific Northwest, providing the geographic and commercial diversity the 

Department has prioritized in distributing Haneda slots.

The Delta MEC and the Port of Seattle oppose the motions of American and Hawaiian, each 

stating that Delta’s service would benefit the traveling and shipping public in Seattle and the 

entire Pacific Northwest region. 

In responding to Delta, American asserts that the Department should ignore Delta’s argument 

that its Seattle-Haneda cutbacks reflect a seasonal adjustment, as there is little seasonality in 

U.S.-Japan markets. Indeed, American notes that Delta made no seasonal cutbacks to its SeattleNarita service.16 American contends that, in light of all the service Delta has eliminated, Delta is 

providing no public benefits with its Seattle allocation, and the Department has the legal right 

and duty to withdraw Delta’s Seattle-Haneda authority.17

 13 Delta Answer, at 3.

14 Delta Answer, at 4-6.

15 Delta Answer, at 1-2 and 8-9.

16 Consolidated Reply of American, at 6-8.

17 Consolidated Reply of American, at 1-2.
5

In responding to Hawaiian, American agrees that the Department should withdraw Delta’s 

Seattle-Haneda frequency and reallocate it to another carrier, but argues that Hawaiian’s 

statement of future intent to apply is not the same as an application, and therefore that 

American’s application for Los Angeles-Haneda authority is uncontested. Under those 

circumstances, American urges the Department to immediately withdraw Delta’s Seattle-Haneda 

authority and reallocate it to American for Los Angeles-Haneda service.

In its sur-reply to American, Hawaiian refutes American’s view that its Los Angeles-Haneda 

proposal is uncontested. Hawaiian asserts that it stands ready to file an application as soon as the 

Department calls for competing applications to be filed. 

Decision

In light of Delta’s extensive winter-season Seattle-Haneda service cutbacks, the submissions of 

American and Hawaiian and the responses thereto, the Department believes that the public 

interest requires a fresh examination of whether the best use of the Seattle-Haneda opportunity is 

to allow Delta to retain the slot pair for Seattle-Haneda service, or whether the public interest 

would be better served by reallocating the slot pair for service from another U.S. city by another 

U.S. carrier or by Delta. 

To make the necessary public interest determinations, a complete evidentiary record will need to 

be established. The Department has therefore decided to institute a proceeding to develop such a 

record. Interested parties will be free to argue in favor of maintaining the allocation to Delta for 

Seattle-Haneda service, or in favor of allocating the slot pair to a different U.S. carrier, or to 

Delta for a different U.S. city. The principal objective in this proceeding will be to maximize 

public benefits with this scarce resource.

The Department does not need to decide whether Delta’s current level of Seattle-Haneda service 

triggers the dormancy condition. Where frequency allocations are not being operated effectively, 

the Department has the authority to reallocate them to ensure that they are used effectively and in 

a manner that promotes competition and otherwise best serves the public interest.18 The 

Department finds that the public interest warrants a proceeding to determine whether it remains 

in the public interest to allow this limited Haneda opportunity to remain with Delta for service at 

Seattle, or whether the public interest favors an alternative use of the authority.19

Proceeding and Evidentiary Requirements

The Department is instituting this proceeding to determine, based on a fresh evidentiary record,

whether the public interest would be best served by allowing Delta to retain the currently-

 18 Order 95-2-30, at 5 and Order 94-12-7, at 8.

19 We note the possibility that this proceeding will not be completed by March 29, 2015, the date on 

which Delta plans to resume a full pattern of daily service in the Seattle-Haneda market. It is therefore 

likely that Delta will have sold tickets for Seattle-Haneda services scheduled to occur on or after that date. 

Were the Department to ultimately decide in this proceeding to reallocate the Seattle service to another 

gateway, the Department would expect Delta to reaccommodate, either on its own or another carrier’s 

services, any passenger who might hold tickets for Delta’s Seattle-Haneda nonstop service.
6

allocated Seattle-Haneda slot pair or, instead, by an alternative disposition of the Seattle-Haneda 

slot pair.

As noted above, the principal objective in this proceeding will be to maximize public benefits. 

In this regard, consideration will be given to the proposal most likely to result in service that best 

meets the needs of the traveling and shipping public. The Department will also consider the 

effects of each service proposal on the overall competitive environment, including effects on the 

market structure and on competition in the U.S.-Japan market. In addition, consideration will be 

given to other factors historically used for carrier selection, where relevant.

Should there be a decision to select an alternative gateway to Haneda, the Department would 

expect to allocate the slot pair for an indefinite term, subject to a start-up condition and the

standard 90-day dormancy condition.20 For any slot pair not used for a period of 90 days, the 

allocation with respect to that slot pair would expire automatically and revert to the Department

for reallocation.

The Department has decided to use written, non-oral show-cause procedures under Rule 210 of 

the Department’s regulations (14 CFR 302.210) in deciding this case. The Department finds no 

material issues of fact that would warrant an oral evidentiary hearing in this case. The 

Department is also simplifying its procedures and evidentiary requirements, consistent with 

securing an adequate decisional record with the least possible delay and without unnecessary 

cost to the interested parties. 

Except for procedural dates, all responsive pleadings should conform to Part 302, Subpart C of 

the Department’s regulations (14 CFR Part 302). All submissions should be filed with the 

Department of Transportation, 1200 New Jersey Avenue, S.E., West Building Ground Floor, 

Room W12-140, Washington, D.C. 20590, in the captioned Docket.

21 For each application the 

Department would expect to see the following information for the forecast year, defined as the 

12 months ending December 31, 2015:

1. Complete service proposals including proposed routing, date for instituting service, 

and single-plane schedules. If a carrier is relying upon connecting traffic, it should 

provide proposed nonstop-to-nonstop connecting schedules. If a carrier intends to 

offer seasonal service, it must so state and specify the period during which the 

seasonal services would be offered. 

 20 In its October 9 motion, Hawaiian suggested that the Department modify the standard dormancy 

condition. We believe that, as this order makes clear, we have adequate means to address our public 

interest concerns without interfering with our long-settled dormancy language. However, if Hawaiian 

holds a different view, it will be free to argue its point on the record of this proceeding, as will any other 

parties.

21 The original filing should be on 81⁄2" x 11" white paper using dark ink (not green) and be unbound 

without tabs, which will expedite use of our docket imaging system. In the alternative, parties are 

encouraged to use the electronic submission capability available through the Regulations.gov Internet site

(http://www.regulations.gov) by following the instructions on the web site. Additionally, service by 

facsimile or electronic mail is authorized. Parties should include their fax numbers and email addresses 

on their submissions and should indicate the method(s) of service used on their certificates of service.
7

Proposed schedules should contain flight numbers, complete routings from origin to 

destination (including behind-gateway and beyond-gateway points, if the carrier is 

relying upon connecting traffic, and elapsed time for services), departure and arrival 

times in local time, equipment types (including seat configuration by class of service 

and the cargo capacity available), days scheduled, classes of service offered, and the 

limitations, if any, on the number of seats available for each class of service;

2. A brief description of the types of scheduled service the carrier currently provides, if 

any, between the United States and Tokyo, Japan, including whether the services are 

direct or code-share operations and whether they are seasonal or year-round;

3. A statement describing the benefits of the carrier’s proposed service to the public 

interest; 

4. A statement as to whether or not the aircraft to be used in the proposed schedules are 

on hand or on order. If on hand, indicate where and the extent to which those aircraft 

are currently being used. If on order by purchase or lease, indicate when they will be 

delivered and how the aircraft will be financed. Indicate whether the aircraft to be 

used comply with FAR-36. If not, indicate plans for achieving compliance;

5. Estimated number of gallons of fuel to be consumed by aircraft type on an annual 

basis as a result of the proposed service, and indicate the availability and method of 

obtaining the necessary fuel; 

6. A statement as to whether the carrier would accept a condition requiring institution of 

service by a date specified by the Department, and, if so, what date the Department 

should specify.

To the extent that any of the requested information has already been provided on the record, 

carriers may refer to that information in supplemental pleadings. Carriers may, of course, also 

submit any additional information beyond that requested if they believe it would be useful to us 

in reaching a decision.

Procedural Timetable

In light of the Department’s goal of reaching a prompt final decision, the following procedural 

schedule for submissions has been established:

Petitions for Reconsideration: December 22, 2014

Answers to Petitions: January 2, 2015

Applications/Supplements/Amendments: January 5, 2015

Answers: January 12, 2015

Replies: January 20, 2015

In consideration of the procedural schedule, as discussed above, the Department authorizes

service by facsimile or electronic mail. Parties should include their fax numbers and/or e-mail 
8

addresses on their submissions and should indicate on their certificates of service the methods of 

service used. Applicants not using facsimile or electronic mail must provide an original and five 

copies of all submissions to the Department of Transportation, Dockets, no later than the dates 

indicated. Please also provide an electronic copy of all responsive pleadings to: 

Brett.Kruger@dot.gov.

ACCORDINGLY,

1. The Department institutes a comparative carrier selection proceeding in Docket DOT-OST2010-0018, to be decided by written, non-oral procedures under Part 302 of our regulations (14 

CFR Part 302.210);

2. This proceeding will consider whether the public interest calls for permitting Delta Air Lines, 

Inc. to retain the currently allocated Seattle-Haneda slot pair for scheduled combination services, 

or whether the public interest calls for an alternative use of that slot pair;

3. The motion of Hawaiian Airlines, Inc., for leave to file an otherwise unauthorized document

is granted;

4. Applications and other responsive pleadings should be filed in accordance with the procedural 

schedule set forth in this order; and

5. This order will be served on Delta Air Lines, Inc.; American Airlines, Inc.; Hawaiian 

Airlines, Inc.; United Airlines, Inc.; the Delta Master Executive Council of the Air Line Pilots 

Association International; the Port of Seattle; all certificated U.S. combination carriers operating 

large aircraft; the U.S. Department of State (Office of Aviation Negotiations); the Federal 

Aviation Administration; and the Ambassador of Japan in Washington, D.C.

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov