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

ANSWER OF DELTA AIR LINES, INC. TO OBJECTIONS TO SHOW CAUSE ORDER 2012 - 11 - 12 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 Planni ng Andreas Renner Director

– International 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. Washingto n, 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

December 3 , 2012BEFORE 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

ANSWER OF DELTA AIR LINES, INC. TO OBJECT IONS TO SHOW CAUSE ORDER 2012 - 11 - 12
Delta is very pleased the Department has tentatively decided to grant Delta’s motion to operate Haneda service from the Seattle gateway. Seattle is the largest U.S.

- Tokyo O&D market that currently lacks Haneda servic e . O pening Seattle for nonstop service to Haneda
will create an important new hub gateway for the entire Pacific Northwest region. Delta’s Haneda service will provide a beneficial alternative to the other west coast gateways. The Show Cause Order found that:

• “Delta’s proposal would best serve the public interest by providing the first nonstop Haneda service on a significant mainland U.S.

- Tokyo route that currently lacks any such service.”

• “Delta’s proposed service would further serve the public interest by providing a number of western cities with a first one

- stop connecting opportunity to Haneda.”

• “cities that now enjoy one

- stop connections over more southerly gateways would gain the option of service over a less circuitous northwest gateway.”

• “Allowing Delta to move from Detroit to Seattle would . . . address a diversity of public interest goals.” Order 2012

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- 12 at 5

- 6. Delta fully agrees with the Department’s tentative findings, all of which are well supported in the record. American filed comments urging that all carriers be allowed gateway flexibility , but d id not object to t he tentative award for Delta. Hawaiian filed neitherDelta Answer Page 2 comments nor objections. Only United and its allies, the United /Continental Pilots MEC and the San Franc isco Airport, h ave challenged the Department’s Show Cause Order

. There i s

no m erit to these objections, and t he Department’s well

- reasoned tentative decision should be made final. United claims the Depar t ment erred in selecting Delt a’s proposal because San Francisco is larger than Seattle and is “the biggest West Coast

- Tokyo market without U.S. flag

- operated nonstop service.” Contrary to United’s objections, the Department correctly found in the Show Cause Order that “ [w]hile San Francisco may not have service to Han eda from a U.S. carrier operating it own aircraft, American offers daily nonstop San Francisco

Haneda service through its code share with JAL

. ” ( Show Cause Order at page 6 ). Furthermore, Delta would add that under a metal

- neutral joint venture, the servic es of U.S. carrier and its immunized alliance partner must be considered equivalent . As correctly stated by the Department when it approved the United/ANA immunized alliance: "The intended commercial effects of the ATI Applicants’ respective joint busin ess agreements are similar to those resulting from a merger." Japan ATI Order 2010

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- 4 at 5. There is no denying the fact that San Francisco has nonstop Haneda service and that American participates on the route through its joint venture. In contrast , Seattle has no nonstop Haneda service by any U.S. or Japanese carrier. In carrier selection cases, the Department has long emphasized the importance of “provid[ing] consumers with the special convenience of nonstop service in a market that does not rece ive it .” Order 98

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- 33 at 7. Delta’s Seattle

- Haneda proposal will create this important new convenience, while United’s proposal merely duplicate s existing nonstop service on the San Francisco

- Haneda route. It should be noted that United and ANA have fl exib i l it y within their alliance to offer San Francisco

- Haneda service at their discretion, but Seattle will only receive Haneda se rvice if the DOT approves Delta’s request. DL

- A

- 202, 203. This is an important point because if the Department does not advan ce the interests ofDelta Answer Page 3 unaligned c arriers and their unaligned hub cities , only Star and oneworld gateways will have Haneda access. ANA chose to serve Haneda from Los Angeles (a United hub), and United here proposes a second service from its hub at San Franc isco . The Department acted fairly and correctly in providing geographic diversity for Haneda service from Delta’s Seattle hub. United makes the argument that an award to United would promote competitive balance among U.S. carriers serving Japan. Howe ver, as previously explained by Delta, an award to United would have the opposite effect. Delta , the only non

- aligned carrier serving Japan, would possess a single pair of Haneda slots while oneworld and Star would each have three Haneda slot pairs

. Delt a Exhibit

- R

- 208. United also argues that DOT failed to consider intergateway competition in making its award to Delta. This is a strange argument , since doubling up oneworld and Star alliance service at San Francisco is the antithesis of encouraging int ergateway competition

. Finally, United’s request for back

- up authority should be rejected . United’s request is inconsistent with the DOT’s processing of Haneda slot applications to date . In Order 2010

- 7

- 2, when the initial Haneda awards were made, DOT st ated that if any applicant did not provide the service proposed that the Department would want to reconsider the matter “ on the basis of a fresh record ”. 1 Orde r 2010

- 7

- 2, page 8. Likewise, in the current Show Cause Order , the Department stated that shoul d Delta or any other carrier currently serving Haneda wish to change its gateway, the carrier should expect to compete for the allocation in another comparative selection proceeding. In other words, the DOT has consistently determined that back

- up awards are not appropriate for Haneda slots and that the Department wishes to consider the merits of alternative slot uses based on current facts and circumstances.

1 The DOT specifically addressed this point in its Final 2010 Haneda Order because Continental a nd Continental Micronesia specifically objected to the Show Cause Order to the extent the DOT decided not to award back

- up authority.Delta Answer Page 4 In c onclusion , United ’s objections provide no basis to disturb the Department’s tentative findings . T he Show Cause Order should be made final granting the motion of Delta to move one slot pair from Detroit to Seattle.
R espectfully submitted,

_________________________________ Alexander Van der Bellen Managing Director, Government Affairs

& Associat e General Counsel DELTA AIR LINES, INC.CERTIFICATE OF SERVICE A copy of the foregoing Answer to the Objections to Show Cause Order 2012

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- 12 has been served this 3 rd day of December , 2012, upon the following persons via email: Francis.Heil@aa.com Rob ert.Wirick@aa.com dan.weiss@united.com thomas.bolling@united.com lhalloway@crowell.com gmurphy@crowell.com howard.kass@usairways.com benjamin.slocum@usairways.c om jhill@dowlohnes.com paul.gretch@dot.gov keith.glatz@dot.gov esta.rosenberg@dot.gov brett.kruger@dot.gov todd.homan@dot.gov urskr@state.gov eugene_alford@ita.doc.gov info@airlineinfo.com Tim.OMalley@alpa.org Ishiwata.K@portseattle.org Safora.I@portseattle.org Kyle.Levine@alaskaair.com Megan.Lawrence@alaskaair.com