BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

---------------------------------------- ----------------------- : In the Matter of : : 2010 U.S.
- HANEDA COMBINATION : Docket DOT
- OST
- 2010
- 0018 SERVICE ALLOCATION PROCEEDING : :

-------------------------------------------------- ------------- CONSOLIDATED REPLY OF UNITED AIR LINES , INC. Communications with respect to this document should be sent to: Hershel I. Kamen Senior Vice President
- Alliances, Regulatory and Policy Daniel A. Weiss Managing Director
- International Affairs and Regulatory UNITED AIR LINES, INC. 77 West Wacker Drive
- HDQIZ 10th Floor HDQIZ Chicago, IL 60601 (312) 997
- 7573 hershel.kamen@united.com dan.weiss@united.com Steve Morrissey Managing Director
- Regulatory Affairs and Policy UNITED AIR LINES , INC. 1225 New York Avenue, NW Suite 1100
- DCAIZ Washington, DC 20005 (202) 521
- 4400 steve.morrissey@united.com September 13 , 2012 Thomas Newton Bolling Vice President and Deputy General Counsel Jonathan T. Linde Managing Director and Senior Counsel
- Regulatory UNITED AIR LINES, INC. 77 West Wacker Drive 16th Floor HDQLD Chicago, IL 60601 (312) 997
- 8068 thomas.bolling@united.c om jonathan.linde@united.com Lorraine B. Halloway Gerald F . Murphy Steven J. Seiden CROWELL & MORING LLP 1001 Pennsylvania Avenue, N.W. Washington, DC 20004
- 2595 (202) 624
- 2500 lhalloway@crowell.com gmurphy@crowell.com sseiden@crowell.com Counsel for United Air Lines , Inc.BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

---------------------------------------- ----------------------- : In the Matter of : : 2010 U.S.
- HANEDA COMBINATION : Docket DOT
- OST
- 2010
- 0018 SERVICE ALLOCATION PROCEEDING : :

-------------------------------------------------- ------------- CONSOLIDATED REPLY OF UNITED AIR LINES, INC. I. INTRODUCTION T he answers submitted by the other applicants underscore why United ’s 1 application to provide new competitive service at Tokyo Haneda and to serve the large West Coast
- Tokyo market at its San Francisco hub gateway should be selected under the Department’s p ublic interest standards

– which are based on providing the most benefits to the greatest number of consumers. Members of the public who stand to re ap the significant consumer benefits that would flow from United’s proposed San Francisco
- Tokyo Haneda flights have urged the selection of United’s proposal in this proceeding. San Francisco International Airport and the United and Continental Master Executive Council s of the Air L ine Pilots Association, International have submitted answers supporting United’s application. They join Democratic Leader Nancy Pelosi , other members of Congress, San Francisco Mayor Edwin Lee, and the San Francisco Chamber of Commerce , among oth er civic and business partners, in supporting United ’s application. Exhibit

1 Common names are used for airlines.Consolidated Reply of United

Page 2 UA
- R
- 119 . All of these supporters recognize that United’s San Francisco
- Tokyo Haneda proposal best meets the needs of the flying public and their communities . None of the proposals submitted by the other applicants

– all of which already have access to Tokyo Haneda

– should be selected over United’s proposal to provide new entrant San Francisco
- Tokyo Haneda service:
 Delta asks the Department to award Tokyo Haneda service to its non
- hub at Seattle, a gateway that is nearly three times smaller than United ’s San Francisco hub and which would depend almost exclusively on codeshare service s operated by another airline for behind gateway connections. Delta’s proposal would mean that U.S. W est C o ast consumers are limited to only selecting Delta for U.S. carrier service to Tokyo Haneda , as its aim is to prevent United from entering the market. Finally, the Department has already found Delta’s Seattle gateway to be inferior to United’s San Francisc o gateway in the previous proceeding due to Seattle’s comparatively small size and l imited connecting opportunities. Nothing has been presented in this year’s proceeding that would make the Department want to reverse its position on Seattle (Delta) versus San Francisco (United).
 Hawaiian ’s application to provide service in a n island tourist market that would offer no connections to the U.S. mainland whatsoever does not compare with the sign i ficant public benefits offered by United’s proposal, especially since it would benefit virtually no U.S. consumers.
 American’ s proposal to use these scarce Haneda slots to duplicate existing nonstop U.S. carrier service at a n already well
- served gatewa y cannot match the consumer benefits that would be provi ded by United’s San Francisco hub and should be rejected . The Department’s public interest standards compel the selecti on of the proposal that would provide the most benefits to the greatest number of nonstop U.S.
- Tokyo passengers and their communities. In evaluating which applicant should be authorized to serve which gateway, the Department should consider the carriers ’ ability to flow traffic through their proposed gateway s on their own connecting flights, the size of the local market s to be served, the carrier s’ track record s of instituting and maintaining service between U.S. gateway s and Tokyo, and new competition for incumbent U.S. airlines that already offer nonstop service at Tokyo Haneda . Based on th ese criteria , United’s San Francisco
- Tokyo H aneda proposal is the clear winner .Consolidated Reply of United

Page 3 II. ANSWERS SUBMITTED BY THE OTHER APPLICANTS DEMONSTRATE WHY UNITED’S PROPOSAL SHOULD BE SELECTED The arguments raised by each of the other applicants demonstrate why United’s San Francisco
- Tokyo Haneda prop o sal should be selected . A. Delta ’s Proposal to Serve a Small U.S. Gatewa y With Few Online Connections, Making Delta the Only U.S. Carrier Allowed to Operate Between the West Coast and Haneda , Would Not Serve the Public Interest Delta’s proposed Seattle
- Tokyo Haneda servi ce should be rejected here

– just as it was in the initial Haneda slot proceeding

– because there are larger gateways more deserving of the award for U.S. car rier service and market access deficiencies that need to be addressed . Indeed , the Department has already stated that Delta’s Seattle proposal offers a less compelling argument than Uni ted's San Francisco proposal: “ we tentatively find that selection of Delta at Los Angeles would address greater service needs than selection of Delta's Seattle proposal , which we find far less compelling than Los Angeles in light of the strong Los Angeles local market, or United's San Francisco proposal.” Order 2010
- 5
- 7 at 11. Given that the Department previously selected Delta to serve the Los Angeles market, the next gateway to be selected in this proceeding based on size and consumer benefits is San Francisco, not Seattle. None of Delta’s attempts to distort facts, the Department ’s precedent , and basic market p rinciples , can hide the weaknesses of Delta’s proposal and its own position in the U.S.
- Japan market. Not only is the San Francisco
- Tokyo market nearly three times the size of the Seattle
Tokyo market ( Exhibit UA
- R
- 100) , but United’s San Francisco
- Hane d a service will reach over 600,000 more consumers than Delta at Seattle

– even with Delta’s codesharing on Alaska . Exhibit UA
- R
- 108 at 1 . Excluding points that already connect to Delta’s existing Los Angeles
Haneda service, that figure jumps to 1. 5 million more consumers that would be reached by United’s proposed service . Id . at 2 . Delta’s outsized reliance on Alaska
- operated codeshareConsolidated Reply of United

Page 4 service to support its Seattle
- Tokyo Haneda proposal also far exceeds t he level of Alaska/Horizon
- operated codesh are service that formed part of Delta’s Los Angeles
- Tokyo Haneda proposal that was selected in the initial proceeding (86% versus 56%) 2 and w as viewed by the Department as “augment[ing] the large Los Angeles
- Tokyo local traffic base . ” Order 2010
- 5
- 7 at 9. The local Seattle
- Tokyo market is also nearly five times smaller than the Los Angeles
- Tokyo market (which already enjoys Delta nonstop service to Haneda) and nearly three times smaller than the San Francisco
- Tokyo market. Exhibit UA
- R
- 100. Additionally , because Delta cannot guarantee any level of Alaska
- operated connecting services at Seattle over the long term since it does not control Alaska’s scheduling decisions, because the carriers cannot coordinate on pricing and inventory management, and because any Delta
- ticketed customer bound for Tokyo could certainly displace a customer that Alaska may have ticketed for travel on its own network , the true incremental value of Delta’s connections is highly questionable. Delta ’s claim of entitlement to the available Haneda slots because of the alleged “market dominance of the U.S.
- Japan ATI alliances ” (Answer of Delta at 3) simply does not withstand scrutiny. Delta itself has the largest capacity share (28.6%) of the West Coast
- Tokyo market held by a ny carrier

– and more than twice the share held by United (12.1%) . Exhibit UA
- R
- 106. In terms of interalliance competition, Delta and its immunized SkyTeam partner Korean also hold the largest capacity share of the West Coast
- Tokyo market, including the share held by the immunized United/ANA alliance . Exhibit UA
- R
- 107. While D elta correctly points out that the Department needs to “consider the ‘overall competitive environment’ and ‘market structure’” in

2 Delta would only provide online connecting service to Haneda in four of the 28 markets that it holds up as roundtrip connections to its proposed Seattle
- Tokyo Haneda service, as compared to the 10 of 18 roundtrip connections that it claimed Alaska/Horizon would provide to Delta’s Haneda service at Los Angeles. Consolidated Answer of United at 5 ( citing Application of Delta at 4; and Application of Delta dated Feb. 26, 2010 in this docket, Exhibits DL
- 126 to 129).Consolidated Reply of United

Page 5 this proceeding (Answer of Delta at 5 (citing Orde r 2012
- 8
- 20)), it conveniently fails to mention its already commanding presence on the West Coast and that the Department determined that its approval of the Star and oneworld applications in the recent U.S.
- Japan Alliance C ase would achieve a “balanced co mpetitive inter
- alliance dynamic in the U.S.
- Japan market ” and an “improved competitive balance in the U.S.
- Asia market [that] would increase discipline versus SkyTeam.” Order 2010
- 10
- 4. Even Delta ’s attempt to criti ci ze United’ s forthright disclosure with re spect to its current year - round San Francisco
- Tokyo Narita service in the event the Department selects United’s proposal belies Delta’s true competitive motivation for committing to maintain its existing Seattle
- Tokyo Narita service alon gside its proposed Seattle
- Tokyo Haneda service: Delta “must maintain its Seattle
- Narita hub schedule to provide connectivity to the rest of Asia .” Application of Delta at 6. T his just calls into question the sustainability of Delta’s proposed Seattle
- To kyo Haneda service, in addition to the reasons discussed below. In one of its more disingenuous claim s , Delta asserts that “United and ANA have flexibility within their alliance to offer San Francisco
- Haneda service at their discretion, but Seattle will only receive Haneda service if DOT approves Delta’s request.” Answer of Delta at 9. As Delta knows, ho wever, any pie chart depicting ANA and JAL’s total Tokya Haneda slot holdings (Answer of Delta, Exhibit DL
- A
- 105) is meaningless. Regardless of the number of slots hel d by these Japanese carriers, each can only operate two slot pairs for service to the U. S. ( s ee U.S.
- Japan Memorandum of Understanding of October 25, 2010, Annex, Section 3), and United will continue to be the only U.S. carrier serving Japan that remains locked out of Haneda if the Department does not grant its application . Exhibit U A
- R
- 101 . In presuming that ANA would simply abandon the use of its own scarce Haneda slots in the two largest U.S.
- Tokyo markets, D elta also asks the Department to ignore the valuable consu mer benefits that it hasConsolidated Reply of United

Page 6 already found to attach to ANA’s existing Haneda service s at Los Angeles and Honolulu . See Order 2010
- 10
- 4 at 10 ; MIDT YE, July 2012; and Answer of Delta at 7 . In “find[ing] no merit” in Northwest’s argument

– similar to the one that its successor Delta proposes here with respect to ANA

– that United s hould terminate its existing service and move its frequencies to another market that United had proposed to serve in a limited
- entry route proceeding, the Department held that “[p]assengers are benefiting from that service, and we would not see it as advan cing the public interest for United to deprive them of those benefits when we have an alternative available that would address a critical service need in the U.S.
- China market.” Order 2007
- 2
- 10 at 8 . Delta per s ists in twisting the Department’s well
- established precedent on metal neutrality in immunized joint ventures (including those in which Delta is a member) to suit its misguided competition arguments . In this proceeding, Delta for the first time has taken the position that U.S. carrier grow th is incompatible with metal neutrality in an immunized joint venture

– arguing that “United can not have it both ways” in reference to a false choice between antitrust immunity and a carrier’s desire to serve a covered route with its own aircraft and crew s . Answer of Delta at 9 ; see also Application of Delta at 8
- 9 . While the Department views “[t]he intended commercial effects of [immunized alliance] agreements [as] similar to those resul t i ng from a merger” (Answer of Delta at 8 ( citing Order 2010
- 10
- 4 at 5), m etal neutrality is not a zero sum game. Despite its statements to the contrary, Delta has publicly agreed with its own pilots that immunized alliances “creat[e] new oppor tunities for American workers

– including Delta flight crews” (Consolidated R eply of SkyTeam Applicants dated Nov. 27, 2007 in Docket DOT
- OST
2007
- 28644 at 3 ( internal citations omitted ) ) and “generate[] additional flying for [Delta’s] pilots and more service choices for passengers” ( Reply of Delta, Virgin Blue and Pacific Blue dated April 6, 2010 in Docket DOT
- OST
- 2009
- 0155 at 1
- 2 ( internal citations omitted ) ) . Delta’sConsolidated Reply of United

Page 7 newly
- discovered position is an attempt to block United from competing at Haneda, and nothing more. Nevertheless, the Depart ment has repeatedly made clear that a U.S. carrier’s participation in an immunized metal neutral joint venture does not mean that: (1) the U.S. carrier partner has lost the right to seek additional service opportunities using its own aircraft and crews; or (2) seeking such opportunities is inconsistent with the metal neutrality or consumer benefits on which the grant of immunity was based . Among the Department’s consistent statements that fly in the face of Delta’s position are the following :
 “The Department has...found that [immunized] al liances increase capacity over the long
term and reduce fares due to, among other factors, the elimination of double marginalization

– both of which are substantial public benefits.” Order 2011
- 6
- 9 at 4.
 “[The joint venture] pools resources to achieve substantial efficiencies and cost savings that will help...the participants manage cyclical changes in the industry to preserve existing services, with a view towards growing capacity and enhancing competition between carriers and alliances .” Order 2009
- 4
- 5 at 19.
 “ [The Department] believe [s] that American, Continental, and United, like their partners, have the incentive to increase capacity if possible, which could provide more opportunities for pilots and other labor groups.” Order 2010
- 10
- 4 at 17 ; see also, e.g. , 2009
- 4
- 5 at 19.
 “[T]he Star applicants and oneworld applicants will likely face strong incentives to maintain or expand capacity in the Chicago
- Tokyo market. Failure to do so could ultimately hamper the alliances’ abilities to efficiently route connecting traffic. While the airlines may be able to reap additional profit in the non
- stop market by cutting capacity, these gains could come at the expense of profits on behind and beyond routes that are essential to a robust and functional alliance.” Order 2010
- 10
- 4 at 11.
 “[The Star carriers] should face a countervailing incentive to increase capacity

– not only to facilitate connecting traffic within their network but also to capture a greater sha re of those local passengers that have, until now, opted to utilize competitors’ connecting itineraries. ” Id . at 12 .Consolidated Reply of United

Page 8 Thus, United in this proceeding is pro pos ing to do precisely what the Department has found , over and over again, to be decisive

– which is to offer competitive new U.S. carrier service for its customers, clients, communities and coworkers. Additionally, Delta’s proposal should be rejected because there are serious questions about Delta’s ability to sustain its prop osed Seattle
- Tokyo Haneda service. Delta’s non
- hub operations at Seattle are more than 14 times smaller than those at Delta’s Detroit hub (Exhibit UA
- R
- 109) , which failed to support Tokyo Haneda service despite Delta’s claim that it was “the largest and m ost effective U.S. airline hub for service to Asia [with] nonstop
- to - nonstop Haneda service to 106 U.S. points.” Application of Delta dated Feb. 26, 2010 in this docket, at 4. Delta’s Seattle
- Tokyo Narita load factors also underperform as compared to Del ta’s Narita service at both Detroit, where it has a hub, and Los Angeles, where it offers some connecting services. Exhibit UA
- R
- 112 . Delta failed to use these valuable Tokyo Haneda slots for less than half of the 20
- month period during which i t was supp osed to be providing Haneda service at Detroit. 3 Exhibit UA
- R
- 110 . Adding to this is the fact that Delta has provided only 40% of the capacity it promised with both its Detroit
- Haneda and Los Angeles
- Haneda services (by downgau ging from B
- 747 to A
- 330 aircraft) (Exhibits UA
- R
- 110 and UA
- R
- 111) . Indeed, the benefits of Delta’s purported B
- 747 service at Detroit and Los Angeles were a key factor in the

3 United has nothing but the utmost sympathy for Japan for having to cope with last year’s tragic earthquake and related developments, but given recently
- announced new services between the U.S. and Japan, along with the interest shown in the Tokyo Haneda opp ortunity available in this proceeding, the market has clearly rebounded. Yet Delta still has not made good on its lauded B
- 747 capacity commitments for either of its Tokyo Haneda routes, or on its promise to provide consistent, daily service in the Detroi t - Tokyo Haneda market. Exhibits UA
R
- 110 and UA
- R
- 111 ; see also Order 2010
- 5
- 7 at 10. By contrast, in seeking to extend the startup date for its San Francisco
- Guangzhou service “United [maint ained that it] would not oppose another carrier seeking realloc ation of these frequencies to implement its own nonstop service between the U.S. mainland and Guangzhou.” Motion of United dated June 14, 2011 in Docket DOT
- OST
- 2007
- 28567 , at 1.Consolidated Reply of United

Page 9 Department’s selection of those proposed gateways in the initial proceeding. See Order 2010
- 5
- 7 at 10. B. With Virtually No Benefit to U.S. Consumers and No Connections to the U.S. Mainland, Hawaiian ’s Proposal Should be Rejected Out of Hand In the nearly 200 pages comprising its answer in this proceeding, Hawaiian cannot manage to overcome the inherent f laws of its Kona
- Tokyo Haneda proposal. At nearly three times smaller than the San Francisco
- Tokyo market and with no connections to the U.S. mainland , the Kona
- Tokyo market also consists of less than 3% local passengers. Consolidated Answer of United, E xhibit s UA
- A
- 116 and UA
- A
- 117 ; see also Application of Hawaiian, Exhibit HA
- App2012
- 2 . Thus, Hawaiian’s proposal will benefit virtually no U.S. consumers. This stands in stark contrast to the Department’s selection of Hawaiian’s Honolulu
- Tokyo Haneda proposal in the initial proceeding: “given that Honolulu represents the largest overall U.S.
- Tokyo market, [the Department found] that the large local traffic base should make Hawaiian’s prop osal via ble and sustainable ” notwithstanding its reliance on “Jap an - originating leisure traffic” and “minimal connecting opportunities.” Order 2010
- 5
- 7 at 9. Despite Hawaiian’s best efforts to conflate the two , at less than 7% of the Hawaii
- Tokyo market, Kona is not Honolulu ( much less the entire state of Hawaii ) . Ex hibit UA
- R
- 115 ; s ee also Answer of Ha waiian at 7
- 9 . Nor does the fact that “Tokyo
- Kona has no nonstop service [make it] the most underserved market in this proceeding.” Answer of Hawaiian at 4. Hawaiian, or any other U.S. or Japanese carrier for that ma tter, is free to offer service in the open skies Kona
- Tokyo Narita market. Indeed, JAL offered Tokyo Narita
- Kona service for many years, but finally dropped it in October 2011 after it was unable to sustain its operation in the market . Exhibit UA
- R
- 113 . Hawaiian strongly argues that its proposal to operate the largest aircraft at issue in this proceeding requires that it be selected . Answer of Hawaiian, Exhibits HA
- 2012A
- 108 and HA
-Consolidated Reply of United

Page 10 2012A109 . What Hawaiian fails to calculate is that the largest aircraf t , combined with the smalles t proposed gateway, means lots of empty seats. Even assuming Hawaiian were to capture 100% of the local O&D market, the load factor on Hawaiian’s Kona
- Tokyo Haneda flights would be less than 42%. Exhibit UA
- R
- 114 . Hawaiian makes the same type of erroneous argument as Delta when it comes to the Haneda slots held by Japanese carriers . Even if it were the case that “Japanese carriers are able to exercise some degree of control over the slots allocated to their alliance partners” (Answer of Hawaiian at 17), United remains the only U.S. carrier serving Japan that does not have access to Haneda with its own aircraft and crews . The Department chose to allocate one daily pair of Haneda slots to American , w hich has a n immunized Japanese alliance partner, in the initial proceeding ( see Order 2010
- 7
- 2 ), and Hawaiian fails to explain why United should not receive equal treatment. C. American ’s Proposal Would Unnecessarily Duplicate Delta’s Existing Haneda Service at Los Ang eles and Pales in Comparison to United at San Francisco American has simply not made the case for the Department to allocate a second valuable pair of daily Tokyo Haneda slots for service that would duplicate Delta’s existing service at Los Angeles. While it may be the largest West Coast
- Tokyo market, Los Angeles already has more than adequate service to Tokyo

– with n early twice as many (67) nonstop weekly frequencies. Exhibit U A
- R
- 116 . Granting American’s application would perpetuate this imbalance while leaving the second largest West Coast
- Tokyo gateway without nonstop U.S. carrier service and United without the a bility to operate to Haneda with its own aircraft and crews for the foreseeable future. American’s argument that its Los Angeles
- Haneda proposal must be selected over United at San Francisco “[i]n the interest of competitive balance among the three globa l alliances” alsoConsolidated Reply of United

Page 11 rings h o llow. As discussed below, American also has a history of reducing Tokyo Narita capacity when awarded slots at Tokyo Haneda. But if American was really concerned about maintaining competitive service levels it wouldn’t be cuttin g flights in favor of Tokyo Haneda service and would be willing to make a commitment as to the future of its existing Los Angeles
Tokyo Narita flight. See Application of American at 9. Contrary to American’s assertion, the Department has recently conclud ed that the immunized oneworld alliance has a “sufficient stake [in the U.S.
- Japan market] to exert competitive pressure on SkyTeam and Star” and that a “balanced competitive dynamic for the three alliances [exists in the] nonstop [U.S.
- Japan] market.” Or der 2010
- 10
- 4 at 8. Yet, American is seek ing a second pair of daily Haneda slots while trying to justify keeping Star without U.S. carrier access to Haneda. Moreover, United at its San Francisco hub would o ffer 31 roundtrip connections to its proposed Han eda service, as compared to American’s 23 connections at Los Angeles. Consolidated Answer of United, Exhibit UA
- A
- 123 . T he valuable slots dedicated to American’s Haneda service at New York/JFK sat unused for more than half of the 20 months during which American was required to operate them. 4 Exhibit UA
- R
- 118 . American also completely discontinued its New York/JFK
- Tokyo Narita service in 2012 shortly after recommencing the New York/JFK
- Tokyo Haneda service for which it was connected in the initial proce eding. Exhibit UA
- R
- 117 . The Department shoul d not risk further underutilization of these scarce Haneda slots with an other award to American, particularly in light of its precedents in limited
- entry route proceedings disfavoring duplicative service propo sals ( see, e.g. , Orders 2009
- 3
- 14; 2007
- 9
- 25; and 2007
- 2
- 10) and “enhanc[ing]

4 See supra note 3.Consolidated Reply of United

Page 12 competition by creating opportunities for new entrant carriers to gain market access.” Order 2009
- 3
- 14 ( citing Orders 2008
- 3
- 4 and 2007
- 9
- 25). III. THE UNITED PROPOSAL BEST MEETS THE PUBLIC INTEREST CRITERIA FOR SELECTION For all the reasons stated in this Consolidated Reply and in United’s Application and Consolidated Answer, the Department should select United’s proposal to serve the second largest West Coast
- Tokyo market at its hub at San Francisco International Airport to maximize the public benefits available from the allocation of two pairs of Tokyo Haneda slots. United’s proposed flights will provide additional capacity and greater convenience for the large business c ommunities in both San Francisco and Tokyo, the large Japanese and Asian populations in the San Francisco region, the large American community in Tokyo and travelers through United’s San Francisco hub network. See Application of United, Exhibits UA
- 106, 1 07 and 108. United’s proposed San Francisco
- Tokyo Haneda service will also provide increased competition in the U.S.
- Japan market by adding a fourth U.S. carrier at Haneda, by introducing new carrier competition for beyond points across the Western part o f the U.S. that already have connecting service via Los Angeles, and by making daily nonstop U.S. carrier Tokyo Haneda service available in each of the two largest West
- Coast Tokyo markets.Docket DOT - OST - 2010 - 0018

Haneda Service 

## Before The Department Of Transportation 2012 U.S. – Tokyo Haneda Combination Services Allocation

Proceeding Docket DOT - OST - 2010 - 0018

Nonstop San Francisco – Tokyo Haneda

Reply Exhibits of:Docket DOT - OST - 2010 - 0018

Haneda Service Index of Exhibits Page 1 of 2 

### United Index Of Reply Exhibits Exhibit Number Tokyo - Haneda Service Number Of Pages UA - R - 100 San Francisco Is The Second Largest West Coast -

Tokyo Market 1 UA - R - 101 United Is Not Currently Permitted To Operate At Tokyo

Haneda 1 UA - R - 102 California Exports Have Grown 15.1% Between 2009

And 2011, And Total Over $159 Billion 1 UA - R - 103 California Exports To Japan Have Grown 9.6% Between

2009 And 2011, And Total Over $13 Billion 1 UA - R - 104 Japan Is California’s Second Largest Export Market In

Asia 1 UA - R - 105 The San Francisco Area Is Home To 31 Fortune 500

Companies, The Most Out Of Any Gateway Competing In This Proceeding 2 UA - R - 106 Delta Holds The Highest West Coast - Tokyo Capacity

Share Of Any Carrier 1 UA - R - 107 Delta And Its SkyTeam Immunized Partner Korean Hold

The Highest West Coast - Tokyo Capacity Share 1 UA - R - 108 United’s San Francisco - Tokyo Haneda Proposal Will

Reach More Consumers Than Delta At Seattle Even With Delta’s Codesharing On Alaska Airlines 2 UA - R - 109 Delta’s Seattle Operations Are Over 14 Times Smaller

Than Delta’s Detroit Hub, Which Failed To Support Tokyo Haneda Service, Despite Delta Claiming Detroit As The Largest And Most Effective Airline Hub For Services To Asia 1

UA - R - 110 Delta Did Not Meet Its Service Commitment Regarding

Detroit - Tokyo Haneda Capacity 2 UA - R - 111 Delta Did Not Meet Its Service Commitment Regarding

Los Angeles - Tokyo Haneda Capacity 1Docket DOT - OST - 2010 - 0018

Haneda Service Index of Exhibits Page 2 of 2 

### United Index Of Reply Exhibits Exhibit Number Tokyo - Haneda Service Number Of Pages UA - R - 112 Delta’s Seattle - Tokyo Narita Load Factor Underperforms

Compared To Detroit - Tokyo Narita, Where Delta Has A Hub, And Compared To Los Angeles - Tokyo Narita Where Delta Operates Some Connecting Services 1
UA - R - 113 Nonstop Service Between Kona and Tokyo Has Proven

Unsuccessful 1 UA - R - 114 Hawaiian’s Large Aircraft Size Is Unwarranted For The

Small Kona - Tokyo Market Which Will Not Even Fill 50% Of Hawaiian’s Plane 1 UA - R - 115 Hawaiian’s Proposed Gateway Of Kona Represents Less

Than Seven Percent Of The State’s Traffic To/From Tokyo 1 UA - R - 116 The Los Angeles - Tokyo Market Already Has More

Service Than The San Francisco - Tokyo Market 1 UA - R - 117 American Has A History Of Reducing Service When

Awarded A Tokyo Haneda Slot Pair 1 UA - R - 118 American Did Not Meet Its Service Commitment

Regarding New York / JFK - Tokyo Haneda Capacity 1 UA - R - 119 Letters Of Support 14Docket DOT - OST - 2010 - 0018

Haneda Service UA - R - 100 Page 1 of 1 

### San Francisco Is The Second Largest West Coast - Tokyo Market

Source: MIDT YE July 2012 Note: Tokyo = Tokyo Haneda + Tokyo NaritaDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 101 Page 1 of 1 

### United Is Not Currently Permitted To Operate At Tokyo Haneda

Source: August 2012 OAG 1/ Seven frequencies currently operated by Delta are at issue in this proceeding

U.S. Carrier Tokyo Haneda Weekly Frequencies Delta 1/ 14 American 7 Hawaiian 7 United 0 14

7 7

0 0 2 4 6 8 10 12 14 16

Delta 1/ American Hawaiian United

Tokyo Haneda Weekly FrequenciesDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 102 Page 1 of 1 

### California Exports Have Grown 15.1 % Between 2009 And 2011, And Total Over $159 Billion

Source: U.S. Census Data California Exports ($MM)

$120,080 $143,192 $159,122

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

2009 2010 2011
California Exports ($MM) 2009 $120,080 2011 $159,122 Growth 15.1%Docket DOT - OST - 2010 - 0018

Haneda Service UA - R - 103 Page 1 of 1 

### California Exports To Japan Have Grown 9.6% Between 2009 And 2011, And Total Over $13 Billion

Source: U.S. Census Data California Exports To Japan ($MM)

California Exports To Japan

($MM) 2009 $10,902 2011 $13,096 Growth 9.6% $10,902 $12,180 $13,096

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

2009 2010 2011Docket DOT - OST - 2010 - 0018

Haneda Service UA - R - 104 Page 1 of 1

Source: U.S. Census Data



### Japan Is California’s Second Largest Export Market In Asia
Top California Export Markets In Asia ($MM) - 2011

$14,188 $13,096

$8,426 $7,664 $6,245 $4,139

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000

China Japan South Korea Hong Kong Taiwan SingaporeDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 105 Page 1 of 2 

### The San Francisco Area Is Home To 31 Fortune 500 Companies, The Most Out Of Any Gateway Competing In This Proceeding

Source: Fortune MagazineDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 105 Page 2 of 2 

### The San Francisco Area Is Home To 31 Fortune 500 Companies, The Most Out Of Any Gateway Competing In This Proceeding

Source: Fortune Magazine

31

14
8

0 0 5 10 15 20 25 30 35

San Francisco Los Angeles Seattle Kona Count Of Fortune 500 CompaniesDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 106 Page 1 of 1 

### Delta Holds The Highest West Coast - Tokyo Capacity Share Of Any 

### Carrier

Source: August 2012 OAG Note: Delta currently operates 35 weekly West Coast - Tokyo Frequencies Note: Other includes American, JAL, Singapore Airlines and Malaysian Airlines Rebuttal To DL - A - 101 DL - A - 104 DL - A - 105 DL - A - 201 DL - A - 202


### West Coast – Tokyo Weekly Seat Share

Los Angeles San Francisco Portland Seattle

Current Delta West Coast Tokyo GatewaysDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 107 Page 1 of 1 

### Delta And Its SkyTeam Immunized Partner Korean Hold The Highest West Coast - Tokyo Capacity Share

Source: August 2012 OAG Note: Delta currently operates 35 weekly West Coast - Tokyo frequencies Note: Other includes American, JAL, Singapore Airlines and Malaysian Airlines Note: Neither United nor ANA hold antitrust immunity with Singapore Airlines 

### West Coast – Tokyo Weekly Seat Share

Current Delta West Coast Tokyo Gateways Los Angeles San Francisco Portland Seattle Rebuttal To DL - A - 101 DL - A - 104 DL - A - 105 DL - A - 201 DL - A - 202Docket DOT - OST - 2010 - 0018

Haneda Service UA - R - 108 Page 1 of 2 

### United’s San Francisco - Tokyo Haneda Proposal Will Reach More Consumers Than Delta At Seattle Even With Delta’s Codesharing On Alaska Airlines

Source: MIDT YE July 2012, Tokyo Haneda applications Note: Roundtrip U.S. connections Rebuttal To DL - A - 101 Comparison Including Delta Points That Also Connect At Los AngelesDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 108 Page 2 of 2 

### United’s San Francisco - Tokyo Haneda Proposal Will Reach More Consumers Than Delta At Seattle Even With Delta’s Codesharing On Alaska Airlines

Source: MIDT YE July 2012, Tokyo Haneda applications Note: Roundtrip U.S. connections Comparison Excluding Delta Points That Also Connect At Los Angeles Rebuttal To DL -

A - 101Docket DOT - OST - 2010 - 0018

Haneda Service UA - R - 109 Page 1 of 1 

### Delta’s Seattle Operations Are Over 14 Times Smaller Than Delta’s Detroit Hub, Which Failed To Support Tokyo Haneda Service, Despite Delta Claiming Detroit As The Largest And Most Effective Airline Hub For Services To Asia

Source: August 2012 OAG. Delta 2010 Tokyo Haneda application, page 4 Total Weekly Departures

239 3,395

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Delta @ SEA Delta @ DTW

Delta’s Operations At SEA Are 14.2 Times Smaller Than Delta’s DTW Hub

“Delta’s Detroit hub is the largest and most effective U.S . airline hub for service to Asia, and will provide nonstop - to nonstop Haneda service for 106 U.S . points .” Delta 2010 Tokyo Haneda Application: Rebuttal To DL -

A - 102Docket DOT - OST - 2010 - 0018

Haneda Service UA - R - 110 Page 1 of 2 

### Delta Did Not Meet Its Service Commitment Regarding Detroit - Tokyo Haneda Capacity Rebuttal To DL -

A - 204

“Delta is proposing its largest aircraft – the Boeing 747 - 400 for Detroit. The 403 seat capacity of the 747 will help to maximize the value of the scarce Haneda slots that are available to U.S. carriers.” Delta 2010 Tokyo Haneda Application:

Source: August 2012 OAG. Delta 2010 Tokyo Haneda application, page 4 1/ Figures assume daily, year round service, which Delta has failed to operate 2/ Of all nine months Delta has operated DTWHND, for only two months did Delta meet its commitment to operate 747 - 400 aircraft Delta Is Providing 40% Less Capacity Than It PromisedDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 110 Page 2 of 2

Source: OAG Rebuttal To DL - A - 204 

### Delta Did Not Meet Its Service Commitment Regarding Detroit - Tokyo Haneda CapacityDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 111 Page 1 of 1

Delta 2010 Tokyo Haneda Application:

Source: August 2012 OAG. Delta 2010 Tokyo Haneda application, page 5 1 / Of all 17 months Delta has operated LAXHND, for only two months did Delta meet its commitment to operate 747 - 400 aircraft Delta Is Providing 40% Less Capacity Than It Promised

“Delta will use large capacity 747 - 400 aircraft for maximizing service, competitive,

and public interest benefits.” Rebuttal To DL - A - 204 

### Delta Did Not Meet Its Service Commitment Regarding Los Angeles - Tokyo Haneda CapacityDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 112 Page 1 of 1 

### Delta’s Seattle - Tokyo Narita Load Factor Underperforms Compared To Detroit - Tokyo Narita, Where Delta Has A Hub, And Compared To Los Angeles - Tokyo Narita Where Delta Operates Some Connecting Services

Source : Superset data, full year 2011 Rebuttal To DL - A - 102 DL - A - 103

89% 87%

81%

76% 78% 80% 82% 84% 86% 88% 90%

Los Angeles Detroit Seattle

FY 2011 Tokyo Narita Load FactorDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 113 Page 1 of 1 

### Nonstop Service Between Kona And Tokyo Has Proven Unsuccessful Rebuttal To HA -

2012A - 201 to 207

Source: OAG Note: JAL used to operate nonstop NRT to KOA, with return service via HNL. JAL service began prior to November 2009Docket DOT - OST - 2010 - 0018

Haneda Service UA - R - 114 Page 1 of 1 

### Hawaiian’s Large Aircraft Size Is Unwarranted For The Small Kona - Tokyo Market Which Will Not Even Fill 50% Of Hawaiian’s Plane Rebuttal To HA -

2012A - 108 HA - 2012A - 109 HA - 2012A - 902

Source: MIDT YE July 2012. Hawaiian 2012 Tokyo Haneda application Note: Tokyo = Tokyo Haneda + Tokyo Narita 1/ Calculated as 89,530 annual demand / 365 days / 2 for each direction 2/ Assumes, generously, that Hawaiian will capture 100% of the local O&D marketDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 115 Page 1 of 1 

### Hawaiian’s Proposed Gateway Of Kona Represents Less Than Seven Percent Of The State’s Traffic To/From Tokyo

Rebuttal To HA -

2012A - 301 to 321

Source: MIDT YE July 2012. Hawaiian 2012 Tokyo Haneda application Note: Tokyo = Tokyo Haneda + Tokyo NaritaDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 116 Page 1 of 1 

### The Los Angeles - Tokyo Market Already Has More Service Than The 

### San Francisco - Tokyo Market

Source: August 2012 OAG Count = Number of distinct airlines operating Rebuttal To AA - Pleading, Page 1



### San Francisco – Tokyo Service

Los Angeles San Francisco 

### Los Angeles – Tokyo ServiceDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 117 Page 1 of 1 

### American Has A History Of Reducing Service When Awarded A Tokyo Haneda Slot Pair Rebuttal To AA - R - 106

AA - R - 108

Source: OAGDocket DOT - OST - 2010 - 0018

Haneda Service UA - R - 118 Page 1 of 1

Rebuttal To AA - Pleading, Page 1

Source: OAG 

### American Did Not Meet Its Service Commitment Regarding New York / JFK - Tokyo Haneda CapacityDocket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119 Page 1 of 14



## United provides letters of support for daily, nonstop service between San Francisco and Tokyo Haneda from various Members of Congress, civic leaders

and customersDocket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119 Page 2 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119 Page 3 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119 Page 4 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119 Page 5 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119 Page 6 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119 Page 7 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119 Page 8 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119 Page 9 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119

Page 10 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119

Page 11 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119

Page 12 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119

Page 13 of 14Docket DOT - OST - 2010 - 0018

Haneda Service 

### Letters Of Support UA - R - 119

Page 14 of 14