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

__________________________________________ ) Application of ) ) HAWAIIAN AIRLINES, INC. ) Docket DOT-OST-2010-0018 ) in the matter of 2010 U.S.-Haneda ) Combination Services Allocation Proceeding ) __________________________________________)

ANSWER OF HAWAIIAN AIRLINES, INC. TO PETITION FOR RECONSIDER ATION OF ORDER 2013-11-9 Communications with respect to this document should be addressed to: Mark B. Dunkerley President & Chief Executive Officer Hoyt H. Zia Senior Vice President, General Counsel & Corporate Secretary

Mark K. Arimoto Associate General Counsel

Hawaiian Airlines, Inc. P.O. Box 30008 Honolulu, HI 96820-0008

November 22, 2013 Jonathan B. Hill J. Parker Erkmann Benjamin M. Berlin Dow Lohnes PLLC 1200 New Hampshire Ave., NW Suite 800 Washington, DC 20036 (202) 776-2000 (202) 776-4725 (fax) jhill@dowlohnes.com perkmann@dowlohnes.com bberlin@dowlohnes.com Counsel for Hawaiian Airlines, Inc.BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

__________________________________________ ) Application of ) ) HAWAIIAN AIRLINES, INC. ) Docket DOT-OST-2010-0018 ) in the matter of 2010 U.S.-Haneda ) Combination Services Allocation Proceeding ) __________________________________________)

ANSWER OF HAWAIIAN AIRLINES, INC. TO PETITION FOR RECONSIDER ATION OF ORDER 2013-11-9 Hawaiian Airlines, Inc. (“Hawaiian”) files its Answer in Opposition to the Petition for

Reconsideration of Order 2013-11-9 filed by Delta Air Lines, Inc. (“Delta”) pursuant to Order 2013-11-9. The Department of Transportation (“DOT” or “Department”) has, since the inception of this proceeding in 2010, undertaken a careful and thoughtful review of each route specific proposal before it to determine which w ill “most likely offer and maintain service that best meets the needs of the traveling and shi pping public.” Order 2010-1-17 at 1, 2. Delta now proposes to change radically the basis on whic h DOT evaluates a limited entry market case. Instead of focusing on the merits of a particular route proposal for the traveling public, Delta proposes that the DOT focus on the merits of a particular carrier wit hout reference to the gateway or route proposal. 1 This fundamental change undermines the foundation of this entire

1 It is ironic to contrast De lta’s position on the relaxation of g overnment restrictions on the mobility of Haneda slots to their position on th e relaxation of the restrictions on operating hours at Haneda, which Delta opposed this fall. In the latter case, Delta supported maintaining restrictions on carriers’ freedom to operate. Here, they support ope rational flexibility, apparently seeking to move their Haneda gateways fo r a third time without having to go through a2 proceeding. Moreover, it compromises the myriad of business decisions that carriers have made in reliance on the Department’s Orders au thorizing service thr ough specific gateways. The careful public interest an alysis that DOT has undertaken in arriving at its two final orders in this docket have considered each appl icant’s service proposal, its impact on the overall competitive environment, market structure and competition in the US-Japan market. As DOT stated in Order 2010-7-2 at 6, the Department attempted “to satisfy diverse public interest objectives and needs in selecting carrier proposals for award of available rights [and] the ability to allocate slots pairs to enable four daily U.S.-Haneda services allows us to reintroduce convenient U.S.-Tokyo access while addressing a variety of important public interest objectives.” To turn this proceeding into a ca rrier selection proceeding rather than a route proceeding, the DOT will have to altogether igno re the analytical framework it has established for awarding particular routes over others, given the unique benef its to the traveling public of each such route. Delta’s proposal also underm ines the investments carriers have made in reliance on the Department’s present Orders that awarded carriers specific routes. With the certainty, carriers that were selected on the basi s of their proposed gateway will abandon those gateways to layer additional se rvice on top of the successful r outes, disadvantaging the carriers that made the initial application for and invest ment in the route in reliance on the DOT Order awarding route specif ic authority.

Delta’s reliance on the 2004 Brazilian case is fundamentally misguided. There, the Department sought to correct a competitive imba lance among U.S. carriers. But in the Haneda proceeding, all U.S. carriers currently play by the same rules, which Delta seeks to have changed given its failure to successfully provide servi ce to Haneda from either Detroit or its second

comparative proceeding. In considering Delta ’s petition, the Department should weigh the merits in light of the opportuni sm the proposal represents.3 opportunity, Seattle. At stake in the Brazil proceeding were 105 weekly frequencies between the U.S. and Brazil. Delta, Continental and American held route specific appr ovals from DOT. On the other hand, American, in addi tion to its route specific approva ls, also held, as did United, frequencies obtained through route tr ansfer cases that were not tied to city-pair approvals. In authorizing the change, the Department addresse d the lack of uniformity between the carrier’s rights, a competitive imbalance created by the a pproval process where some U.S. carriers were free to change city-pair routings and some were not. DOT stated in the 2004 Order: “We believe that the disparate treatment of otherwise simila rly-situated carriers in the Brazil market...calls for our according a greater degree of flexibil ity here than might be the case in other circumstances or setting.” Order 200 4-6-25 at 2-3. This is not the case before the Department in the Haneda proceeding. All U.S. carriers are on the same footing and received their authority on

the same basis. Hawaiian opposes the broadening of the present proceeding to include Delta’s proposal. If the Department should chose to consider su ch a change, it should do so in a separate proceeding and should consider the implications of such a change in the context of other route and slot restricted proceedings that come before the Depart ment. Delta’s proposal has farreaching policy implications that require far mo re attention than can be accomplished in the aggressive schedule proposed in this slot allocation proceeding. The only issue before DOT in the proceeding covered by Order 2013-11-9 is the allocation of the American frequencies on a prosp ective basis. While ch anging the rules of the game on a going forward basis within this pro ceeding with adequate no tice, is possible (but4 inadvisable), 2 changing the conditions associated with already issued and effective authority within this proceeding is not permissible under the Administrative Procedure Act. The modification of the Department’s standards fo r already allocated Haneda slots cannot be accomplished in this adjudicatory proceeding. Th e parties to the prior proceedings in this docket, including Hawaiian, have invested millions of dollars in relian ce upon the terms of those awards. Accordingly, adoption of the change pr oposed by Delta in the middle of this proceeding would be arbitrary and capricious. Respectfully submitted.

Jonathan B. Hill J. Parker Erkmann Benjamin Berlin Dow Lohnes PLLC 1200 New Hampshire Ave., NW, Ste. 800 Washington, DC 20036 202/776-2700 Counsel for Hawaiian Airlines, Inc.

Dated: November 22, 2013

2 See Nat’l Whistleblower Ctr. v. Nuclear Regulatory Comm’n , 208 F.3d 256, 262 (D.C. 2000) (changing “procedures on a case-by- case basis” requires “timely noti ce to the parties involved.”).