BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

In the matter of 2010 U.S.-Haneda Combination Services Allocation Proceeding ) ) ) ) ) ) ) Docket DOT-OST-2010-0018

APPLICATION AND SUPPLEMENT TO PETITION OF DELTA AIR LINES, 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 – 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. Washington, D.C. 20005

Alexander Van der Bellen Managing Director – Regulatory and International Affairs & Associate General Counsel Christopher Walker Regional Director – Regulatory and International Affairs DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005 (202) 842-4184 sascha.vanderbellen@delta.com chris.walker@delta.com

November 26, 2013BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

In the matter of 2010 U.S.-Haneda Combination Services Allocation Proceeding ) ) ) ) ) ) ) Docket DOT-OST-2010-0018

APPLICATION AND SUPPLEMENT TO PETITION OF DELTA AIR LINES, INC.

In Delta’s Petition for Reconsideration of Order 2013-11-9, Delta requested that the Department expand the scope of this proceeding to c onsider the issue of gateway flexibility. In the event that Delta’s Petition is granted, Delta hereby applies for an amendment to the terms and conditions of its previously-allocated Haneda slots to allow them to be used at any U.S. gateway. Delta further proposes that the Department allow the same gateway flexibility for all U.S. carriers holding Haneda slots. The U.S.-Japan aviation marketplace is rapidly evolving, and carriers must have flexibility to respond to changes in the marketplace as they occur, without the delay of successive route case proceedings. The Department does not impose route limitations on U.S. carriers’ use of airport slots in any other open skies market. In the large and important U.S.-Brazil market, Department precedent supports eliminating city -pair restrictions on limited entry frequencies previously allocated by route cases. See, Order 2004-6-25. The challenges associated with implementing U.S.-Haneda service under the current operating rules at Haneda, combined with the evolving marketplace dynam ics, make gateway flexibility especially important here. Delta believes that all U.S. carriers should be free to use their allocatedDelta Application/Supplement Page 2 slots to respond to market demands, thereby maximizing customer and public interest

benefits. Hawaiian was the only carrier to object to Delta’s Petition. Delta supplements its Petition with the following response to Hawaiian’s Answer, and respectfully asks the Department to grant gateway flexibility to all U.S. carrier Haneda slot holders in the course of this proceeding: 1. Contrary to Hawaiian’s assertions, Delta does not propose to “change radically” the Department’s consideration of route case awards, or require that future awards be made “without reference to the gateway or route proposal.” (HA ans. at 1). Rather, Delta proposes that the Department apply exactly the same procedures and precedent which it has used in administering U.S.-Brazil awards for more than a decade. By Order 2004- 6-25, the Department found that it was in the public interest to eliminate city-pair restrictions from all prior route case awards and to allow carriers commercial discretion in the use of their frequencies. In the 12 years since that Order was issued, the Department has conducted multiple carrier selection cases to allocate new or unused U.S.-Brazil frequencies. In each case, the carriers’ gateway and route proposals have figured prominently in DOT’s decision, not withstanding the Department’s decision to remove gateway limitations from all prior awards. See, e.g. Orders 2013-6-16; 2009-3- 14; 2005-2-10. The Department’s decision to el iminate gateway restrictions from all prior Brazil awards has not impacted DOT’s ability to conduct appropriate and effective route case proceedings when new or returned frequencies become available, and the Department will be able to do the same at Haneda. 2. Japanese carriers maintain large hubs at Haneda, and there are no restrictions on Japanese carriers’ ability to change the U.S. gateways from which they offer Haneda service. In the interest of fairness it is important that U.S. network carriers serving JapanDelta Application/Supplement Page 3 have commercial flexibility to make the most effective use of their Haneda slots based

on current market conditions. 1 3. Hawaiian’s call for tight regulation of Haneda slots and applying route case constraints in perpetuity to limit competition among U.S. ca rriers is inconsistent with open skies and the Department’s procompetitive aviation polic ies. While comparative route case proceedings may make sense in determining initial allocations of slots and new authority (as in Brazil), U.S.-Haneda carriers should be free to adapt their services to market demands over time, thereby promoting maximum service and competitive benefits. 4. The Department is free to make changes to the terms and conditions of previously issued Haneda slots. Hawaiian concedes as much, but urges that the Department “do so in a separate proceeding.” (HA at p.3). The Administrative Procedure Act requires only that the Department provide appropriate notice of the issues to be considered in this case. There is no APA requirement that the Department establish a separate docket. The issues raised by Delta’s Petition are simple and straight-forward, as evidenced by the pleadings submitted thus far. Hawaiian has been on notice of the proposal since November 19, and the Department has extended the procedural schedule by an additional week, now running through December 16. Since the Department will be conducting a thorough review of the public interest issues associated with U.S.-Haneda service, it will promote sound decision making and administrative efficiency to consider all of the relevant Haneda issues here, including Delta’s Petition.

1 As the only U.S. network carrier without a Japan ese partner at Haneda, the lack of flexibility in managing Haneda slots to improve its overall network servic e offering is particularly harmful to Delta.Delta Application/Supplement Page 4

Respectfully submitted,

_________________________________ Alexander Van der Bellen Managing Director, Regulatory and International Affairs & Associate General Counsel DELTA AIR LINES, INC.CERTIFICATE OF SERVICE A copy of the foregoing Reply has been served this 26th day of November, 2013, upon the following persons via email:

dan.weiss@united.com thomas.bolling@united.com lhalloway@crowell.com gmurphy@crowell.com jhill@dowlohnes.com Francis.Heil@aa.com Robert.Wirick@aa.com howard.kass@usairways.com benjamin.slocum@usairways.com paul.gretch@dot.gov brian.hedberg@dot.gov esta.rosenberg@dot.gov brett.kruger@dot.gov todd.homan@dot.gov urskr@state.gov CristinaSA@state.gov eugene_alford@ita.doc.gov info@airlineinfo.com